Sky Talk

Look at the week ahead: DFW board meetings

With Thursday's date being Oct. 1, it is time for the monthly D/FW Airport board meeting.

Starting with Tuesday's committee meetings and then the full board meeting on Thursday, here are a few of the agenda items that they will talk about:

-It's flu season so the board will be discussing the "pandemic influenza planning program." I'll let you know if that means we'll see masked airport employees like they have in Asia.

-An update on DFW Greenhouse Gas Emissions. I guess the board will find out if the airport is emitting less or more greenhouse gases.

-A report on three commercial developments on airport land: Beltline Station, Southgate Plaza and International Commerce Park.

-Andrea Ahles

D/FW Airport gets $6 million TSA grant for security cameras

Dallas/Fort Worth Airport will be getting new security cameras as part of $6 million federal grant.

The airport received the grant from the Transportation Security Administration and will use the funds to install a closed-circuit television system.

"The addition of new cameras as well as increased storage capability on pre-existing cameras will be a tremendous asset to our security efforts at DFW Airport," said DFW Federal Security director Cedric Alexander.

Alexander added that the new system will help the airport strengthen its security and allow for "more efficient personnel deployment."

Airport spokesman David Magana said that workers will begin installing the new equipment, which includes computer drives for storage, within the month.

-Andrea Ahles

American prices its private debt offering

American Airlines said it priced its private debt offering of $450 million. The secured notes will have a 10.5 percent rate and are due in 2012.

The Fort Worth-based carrier previously announced it would secure the notes with aircraft and would use the proceeds to refinance an existing $432 million bank term loan. The offering is expected to be completed on Oct. 9.

-Andrea Ahles

Extra $10 bucks to fly Sunday after Thanksgiving

Holiday travel just got a little more expensive.

According to FareCompare.com's e-mail alert late Thursday night, both United Airlines and American Airlines have added a $10 surcharge to most of their fares the Sunday after Thanksgiving and for Jan. 2 and 3.

The alert reads as follows:

"The Sunday after Thanksgiving vies with the Wednesday before the holiday for busiest air travel day of the year; the two January dates are also heavily traveled days.

While we have contacted American and United Airlines to get their position on this new surcharge – and will provide those responses when we receive them – it seems clear that this move by the airlines represents an entirely new fee-setting opportunity.  

Bottom line:  Passengers already pay more to fly on certain days – typically, cheaper airfares are available on Tuesdays, Wednesdays and Saturdays – but American and United have now upped the ante, by determining that certain peak travel days are worth an additional passenger-paid "premium"."

It may be worth it to ask the boss for Monday after Thanksgiving off.

UPDATE: Rick Seaney at FareCompare.com sent out another e-mail Friday saying that Delta/Northwest and US Airways matched the $10 "miscellaneous" surcharge on those three dates.

The new alert goes on to say:
 
"The new, targeted surcharge brings sorely needed revenue to the airlines in the current financial doldrums; at the same time, passengers traveling on the three dates in question are already paying a premium price for their airfare and may consider the additional $10 an inconsequential sum.
 
Last year, procrastinators were rewarded with lower fares during the holiday period, but I do not expect that to happen this year." 

-Andrea Ahles

AMR says that its debt offering will be $460 million

AMR Corp., the parent company of American Airlines, said that its underwriters of its public debt offering will exercise their option to buy additional notes for the deal.

The Fort Worth-based company had previously announced that it was offering $400 million in convertible senior notes due in 2014. By exercising the $60 million option, the total debt offering will be $460 million.

The offering is expected to close on Sept. 28.

-Andrea Ahles

BTS revises cancellation and rebooking fees data

American Airlines collected $225 million in fees for the first half of the year from customers who wanted to change, cancel or rebook existing reservations, the Bureau of Transportation Statistics said on Thursday.

The BTS said it has revised its first and second quarter data for reservation, cancellation and rebooking fees. The domestic carriers as a whole collected over $1.18 billion in fees related to cancellations.

American collected the most of an individual carrier, however, if you combine Delta Air Lines and Northwest Airlines, which announced their merger in 2008, Delta-Northwest collected $393 million in fees.

Reservation Cancellation Fees by Airline 2009
Dollars in thousands (000)
Source: Bureau of Transportation Statistics, Schedule P-12
			Fees in thousands of dollars
			Q1(revised)	Q2	Year
1	AA	American Airlines#	115,876	109,647	225,523
2	AS	Alaska Airlines	16,348	15,294	31,642
3	B6	JetBlue Airways	32,178	29,954	62,132
4	CO	Continental Airlines*	59,573	59,763	119,336
5	CS	Continental Micronesia*	611	859	1,470
6	DL	Delta Air Lines*	86,853	100,748	187,601
7	F9	Frontier Airlines	5,776	5,565	11,341
8	FL	AirTran Airways	-	12,269	12,269
9	G4	Allegiant Air	-	1,160	1,160
10	HA	Hawaiian Airlines	5,716	6,606	12,322
11	NK	Spirit Air Lines	5,819	5,943	11,762
12	NW	Northwest Airlines*#	101,227	105,039	206,266
13	QX	Horizon Air	1,792	2,794	4,586
14	SY	Sun Country Airlines	-	387	387
15	UA	United Airlines	78,101	81,104	159,205
16	US	US Airways	66,506	64,017	130,523
17	VX	Virgin America	3,013	3,029	6,042
18	YX	Midwest Airlines	2,185	2,202	4,387
		All Airlines	581,574	606,380	1,187,954
* First quarter numbers revised from numbers released on June 15.
# Second quarter numbers updated from TranStats database release of Sept. 21. -Andrea Ahles

FAQ about American's retiree insurance changes

Once American got back to me yesterday on the issue of changing its retiree medical benefits for thousands of non-union employees, I felt like I was taking a crash course on human resources and benefit management.

The resulting story that appeared in today's paper can be found here.

And evidently there has been some confusion this morning about who this affects and as I said in the article, these changes only affect "officer, management/specialist and support staff work groups." It does not affect nonunion employees such as airport agents or reservation representatives or union-represented groups such as pilots and flight attendants.

Since there are many different scenarios on if you are over 65 or under 65 or if your spouse is 65 or not, I'm just going to post the "frequently asked questions" that American sent out with the letter.

-Andrea Ahles

Frequently Asked Questions

Why the changes to retiree medical coverage?

Health care costs are the fastest growing cost component for employers. Currently, American has significantly greater expenses for retiree health care than other major airlines. American is aggressively looking at the costs associated with all areas of the business and making changes to help better cope with the economic struggles of the industry, while at the same time better prepare the company to compete for the long term. One component of being competitive is better aligning the company’s health care costs with the industry and other large corporations.

Will other work groups receive the same changes to their coverage?

American is currently in federally mediated negotiations with its three unionized work groups, the APA, APFA and TWU. Retiree medical benefits are contractual for unionized employees. Proposals have been presented to each group that align with the retiree medical changes for Management and Support Staff work groups.

Can American Airlines legally change my retiree medical benefits?

As the Plan’s sponsor and administrator, American bears authority and responsibility for the oversight and well being of the Retiree Standard Medical Plan. This means the company reserves the right to modify, revoke, suspend, change or terminate the plan, in whole or in part, at any time, except as limited by provisions of any applicable state or federal law.

Is my Retiree Life Insurance Plan coverage changing?

No changes are being made to the Retiree Life Insurance Plan coverage at this time.

I am married to or have a domestic partner who is an AA Retiree. How does this affect me?

Retirees from the company are required to maintain separate coverage and thus, you are not eligible to become a dependent under your spouse’s or domestic partner's retiree medical coverage.

Could my retiree benefits change again in the future?

No additional retiree benefit changes are planned at this time. However, American Airlines will continue to evaluate all benefits programs and reserves the right to make adjustments as needed to reflect the marketplace, business goals and retiree needs.

Will pending government legislation for health care reform affect my medical coverage?

At this time, AA is unable to speculate about the outcome of any legislation currently pending at the state and federal levels. As always, AA will comply with any new legislation and modify or change Plan rules as required.

UnitedHealthcare Medicare Solutions

Who is UnitedHealthcare Medicare Solutions?

They are a division of UnitedHealthcare that offers retiree medical plans. They have been offering a variety of Medicare plans to people age 65 or older, as well as individuals with certain disabilities, for more than 20 years.

What will UnitedHealthcare Medicare Solutions do for me?

UnitedHealthcare Medicare Solutions will provide you with the resources, information and support you need to make a decision about your retiree medical coverage going forward. They offer participants a wide array of services, including a dedicated team of Retirement Specialists who are trained to assist American Airlines retirees and their Medicare-eligible spouses and domestic partners.

How do I get more information on UnitedHealthcare Medicare Solutions?

UnitedHealthcare Medicare Solutions will mail you information about their services and offerings in about two weeks. If you do not receive this information by October 1, 2009, please contact UnitedHealthcare Medicare Solutions Retirement at 1-877-776-1480. Additionally, UnitedHealthcare Medicare Solutions plans to hold a number of Town Hall style meetings around the country in locations where AA has large populations of retirees.

Can I view information about UnitedHealthcare Medicare Solutions online?

Yes. On October 1, UnitedHealthcare Medicare Solutions will launch a customized Web site for AA Retiree Plan participants at www.UHCMedicareSolutions.com/AA.

Can my caregiver call UnitedHealthcare Medicare Solutions to ask questions for me?

Yes. UnitedHealthcare Medicare Solutions specialists will be able to work with your designee to answer questions and find a plan that fits your needs.

When do I enroll with UnitedHealthcare Medicare Solutions?

You may enroll from November 15, 2009, through December 31, 2009. UnitedHealthcare Medicare Solutions will send you additional information about enrollment in October.

How do I enroll with UnitedHealthcare Medicare Solutions?

UnitedHealthcare Medicare Solutions will be sending you a pre-enrollment packet in October. In that packet, you will receive information on Medicare plan options from UnitedHealthcare Medicare Solutions and information on how to enroll. You will be able to enroll either by telephone with a Retirement Specialist or by mail.

If I enroll with UnitedHealthcare Medicare Solutions, will I still be able to use my same doctors?

You may be able to continue using your same doctor. Not all UnitedHealthcare Medicare Solutions plans feature a network. For those plans with a network of doctors, UnitedHealthcare Medicare Solutions will be able to help you determine if your doctor is in your new plan’s network.

Can I choose to enroll in a medical option offered by another company on my own?

Yes, you can. However, American has asked UnitedHealthcare to provide education and personalized service to its Medicare-eligible retirees through their Medicare Solutions division. They offer a variety of Medicare plans and can offer personalized service to make this transition easier.

If I select UnitedHealthcare Medicare Solutions, when do I get my first invoice?

UHC will advise when to expect your first invoice in their enrollment materials. UnitedHealthcare Medicare Solutions will mail you information that explains the invoicing process in detail.

How do I send a payment to UnitedHealthcare Medicare Solutions?

UnitedHealthcare Medicare Solutions offers several payment options. After you choose a plan and enroll, UnitedHealthcare Medicare Solutions will tell you how you can make your payment.

Medicare

Do I need to already be enrolled in Medicare?

If you are now age 65, yes, you should have already enrolled in Medicare Parts A, B and D. You are encouraged to enroll in a Medicare medical and/or drug plan by December 31, 2009.

What happens to my current Medicare Part D coverage if I enroll in UnitedHealthcare Medicare Solutions Medicare supplement?

Nothing, unless you choose a Medicare plan that includes prescription drug coverage. When you work with a UnitedHealthcare Medicare Solutions Retirement Specialist, he or she will help you choose a Medicare plan that fits your health care needs.

How do I learn more about Medicare?

Please visit www.medicare.gov or call 1-800-MEDICARE (1-800-633-4227).

Prefunding Refund

For individuals who retired between Jan. 1, 1990, through April 30, 2003

I prefunded my Retiree Standard Medical Plan. What happens to this money?

Prefunding is drawn down over a 10-year period. If any portion remains after December 31, 2009, you will receive a refund of your unused balance as of December 31, 2009, plus or minus any gain or loss of investment experience.

How do I find out if I have a remaining prefunding balance?

Contact JPMorgan at 1-800-345-2345 and advise you are inquiring about your employee contributions.

When will I receive my prefunding refund if I have one?

Refunds will be issued by the end of the first quarter of 2010 based on your account balance as of December 31, 2009.

Where will my refund be sent?

Your refund will be mailed to the address you have on file with American Airlines. If you need to update your address, please go to the Jetnet home page and select the "

Update MY Information" link under Resources.

Supplemental Medical Plan

What happens to my Supplemental Medical Plan through HealthFirst?

As part of these changes, Supplemental Medical coverage will no longer be offered to retirees who are age 65 and over. If you are not yet 65 and are enrolled in Supplemental Medical coverage, you may continue your coverage until age 65. If you are not yet 65 and decide that you no longer want to be enrolled in Supplemental Medical, American will allow you to opt out of the coverage during October Benefits Enrollment.

I paid into the Supplemental Medical Plan when I was an active employee and have continued to pay as a retiree. Will I receive a reimbursement?

No. The Supplemental Medical Plan is an insurance product for which you pay insurance premiums. Similar to other types of insurance products, these payments are not reimbursable.

Lifetime Maximum Benefits

What if I’ve hit my medical maximum under the Retiree Standard Medical Plan or the Supplemental Medical Plan?

You are still eligible for UnitedHealthcare Medicare Solutions.

Are there lifetime maximum benefits limits with Medicare or UnitedHealthcare Medicare Solutions options?

No. Medicare or the medical options offered by UnitedHealthcare Medicare Solutions do not have a lifetime maximum limit. These options offer more choices in flexibility and coverage than the AA Retiree Standard Medical Plan option.

How this Change Affects Retiree Plan Participants Age 65 and Over

YOUR COVERED SPOUSE OR DOMESTIC PARTNER

My spouse or domestic partner is over age 65 and Medicare-eligible. How does this affect him or her?

Your spouse or domestic partner will lose his or her coverage under the Retiree Standard Medical Plan as of December 31, 2009. However, your spouse or domestic partner is eligible to enroll in a Medicare plan option. If he or she enrolls by December 31, 2009, he or she will be guaranteed coverage regardless of medical history or pre-existing conditions. Your spouse or domestic partner can call UnitedHealthcare Medicare Solutions about enrolling for coverage with one of their plans.

Does my Medicare-eligible spouse or domestic partner have to enroll with UnitedHealthcare Medicare Solutions?

No. UnitedHealthcare will provide support to you and your spouse or domestic partner in selecting a UnitedHealthcare Medicare plan. However, if he or she waits until after the December 31 enrollment deadline to enroll in a Medicare plan, he or she may not receive the guaranteed issue coverage and be subject to normal eligibility requirements.

My spouse or domestic partner is under age 65 and not Medicare-eligible. How does this affect him or her?

Your spouse or partner will lose his or her coverage under the Retiree Standard Medical Plan as of December 31, 2009, but is eligible for up to 36 months of COBRA coverage. Your spouse or partner will be solicited directly by Benefits Concepts, the COBRA billing administrator, regarding COBRA coverage.

I have Supplemental Medical Plan coverage for my under age 65 spouse or domestic partner. What happens to it?

If your spouse or domestic partner elects to continue medical coverage under COBRA, they may also elect to continue Supplemental Medical coverage for the length of their COBRA coverage.

Can my under age 65 and not Medicare-eligible spouse or domestic partner enroll with UnitedHealthcare Medicare Solutions?

No, because only individuals who are age 65 or older or meet other Medicare eligibility criteria can enroll in these medical options. When your spouse or partner turns age 65 or becomes eligible for Medicare, he or she can use the personalized services of UnitedHealthcare Medicare Solutions by calling 1-877-776-1480. 

 

PAYFLEX RETIREE MEDICAL BILLING

I have been making payments to PayFlex for my retiree medical coverage. What do I do now?

If you are over 65, you will not make payments to PayFlex after December 31, 2009. You should receive your final invoice in mid-November, 2009, for your coverage for the remaining of the year. If you choose a UnitedHealthcare Medicare Solutions, you will begin making payments to them starting in January 2010.

How this Change Affects Retiree Plan Participants under Age 65

How do I find out the contribution rates for retiree medical coverage?

You will receive a

Lifematters newsletter at the end of September detailing contribution rates for 2010. You can also visit the Enrollment Planning page under the Benefits tab of Jetnet to view this information in the 2010 Benefits plan changes. PayFlex, the billing administrator, will send you information explaining how to pay your contributions before the end of 2009.

YOUR COVERED SPOUSE OR DOMESTIC PARTNER

My spouse or domestic partner is under 65 and not Medicare-eligible. How does this affect him or her?

Your spouse or domestic partner can continue to be covered under the Retiree Standard Medical Plan as long as you pay the monthly contribution to PayFlex, the billing administrator, for the Retiree Standard Medical Plan. Once you or your spouse/domestic partner reaches age 65 or becomes Medicare eligible, whichever comes first, they will lose coverage under the Retiree Standard Medical Plan in lieu of other options.

Can my under 65 and not Medicare-eligible spouse enroll with UnitedHealthcare Medicare Solutions?

No, your spouse cannot enroll with UnitedHealthcare Medicare Solutions because only individuals who are age 65 or older or meet other Medicare eligibility criteria can enroll in these UHC medical options. Once your spouse is 65 and eligible for Medicare, he or she can use the personalized services of UnitedHealthcare Medicare Solutions by calling 1-877-776-1480.

My spouse or domestic partner will not turn age 65 until January 1, 2010, or later. What happens?

Your spouse or domestic partner will lose coverage under the Retiree Standard Medical Plan at age 65. Since they will be eligible to enroll in Medicare, they will also be eligible to enroll in guaranteed issue medical insurance.

My spouse or domestic partner is now age 65, or will reach age 65, before January 1, 2010. What happens?

Your spouse or domestic partner will lose coverage under the Retiree Standard Medical Plan at age 65. Since they will be eligible to enroll in Medicare, they will also be eligible to enroll in guaranteed issue medical insurance. They can obtain more information about UnitedHealthcare Medicare plans by calling 1-877-776-1480.

My spouse or domestic partner turns age 65 before I do. What happens?

Your spouse or domestic partner will lose coverage under the Retiree Standard Medical Plan at age 65. Since they will be eligible to enroll in Medicare, they will also be eligible to enroll in guaranteed issue medical insurance. They can obtain more information about UnitedHealthcare Medicare plans by calling 1-877-776-1480.

My spouse or domestic partner turns 65 after I do. What happens?

Once you turn 65 and your spouse or domestic partner is still under 65, he or she loses coverage under the Retiree Standard Medical Plan, but is eligible for up to 36 months of COBRA medical coverage or becomes eligible for Medicare.

OTHER COVERED DEPENDENTS (NOT A SPOUSE OR DOMESTIC PARTNER)

I have a dependent, who is not my spouse/domestic partner, covered under the Retiree Standard Medical Plan. How does this affect my dependent?

Your dependent(s) will continue to receive coverage under the Plan as long as they are eligible until you reach age 65. Once you reach age 65, your dependent(s) will no longer have coverage because you will no longer be in the Plan. Your dependent will be eligible for up to 18 months of COBRA coverage or may be eligible for Medicare.

__________________________________________________________________________

Please visit the Benefits page of Jetnet and check Updates and Announcements to view additional questions regarding changes to the Retiree Standard Medical Plan option participants for Officers, Management/Specialists and Support Staff work groups.

Contact information

UnitedHealthcare Medicare Plans

– 1-877-776-1480 8 a.m. to 8 p.m. (each U.S. Time Zone)

PayFlex Billing Systems

– 1-800-359-3921

AA HR Services

– 1-800-447-2000 8 a.m. to 5 p.m. Central Time – Monday through Friday

American raises even more money

It's a new day and we have another American financing deal.

This morning, American Airlines announced a private offering of $450 million in senior secured notes due 2012.

The Fort Worth based carrier said the notes will be secured by aircraft and the proceeds will be used to refinance an existing $432 million secured bank term loan facility.

This is the latest in a string of financing deals for American and its parent company AMR, who announced last Thursday $2.9 billion in deals and then announced another public stock and debt offering that could net the company about $700 million.

-Andrea Ahles

AMR prices its public offering

This is what I get for checking my e-mail late at night....

AMR announced late Tuesday that it will price its public stock offering of 48,484,849 shares at $8.25 a share. At that price, AMR will raise $400 million from the public offering.

The Fort Worth-based company, which owns American Airlines, also said it has priced its offering of $400 million in 6.25 percent convertible senior notes due in 2014.

In a press release, the company said it expects its net proceeds from the financing deals to be about $770.5 million and will be used for "general corporate purposes."

The full release is here.

-Andrea Ahles

Former American ceo Crandall backs passenger rights bill

While I've been figuring out the nuances of over-65 retiree medical benefits today, a passenger rights forum was held in Washington D.C., where former American Airlines chief executive Robert Crandall came out in support for a passenger rights bill.

According to the Associated Press, Crandall said he was in favor of pending legislation in the Senate that would require that passengers be allowed to deplane after a three-hour wait.

"I think the airline industry should have led the way in responding to this problem rather than having resisted it," Crandall said. "Every responsible airline executive I know thinks these things are an outrage."

-Andrea Ahles