American Airlines freezing pensions
DALLAS – American Airlines will freeze pensions for most workers and back away from a threat to terminate the plans, as the company tries to cut costs while in bankruptcy protection.
The freeze will apply to flight attendants and ground workers but not yet to pilots.
Last month American said it would terminate pension plans for 130,000 current and retired employees and hand over the plans’ assets and obligations for future payments to a government agency. Under a freeze, workers will keep their current pensions but won’t earn any additional benefits. Termination could have reduced benefits for about 2 percent of workers other than pilots and executives, American estimated.
The fate of pensions for about 10,000 pilots remained up in the air. The pilots can take part of their payout in a lump sum when they retire, and American insists that they give up that perk.
Consumer borrowing rises by $17.8 billion
WASHINGTON – Americans stepped up borrowing in January to buy more cars and attend school.
Consumer borrowing rose by $17.8 billion in January, the Federal Reserve said Wednesday. That followed similar gains in December and November.
The gains for those three months were the largest in a decade and helped consumer borrowing climb to a seasonally adjusted $2.5 trillion. That nearly matches the pre-recession level.
The January increase was driven by a $20.7 billion increase in a category that mostly measures demand for auto and student loans. It was the biggest increase for that category since November 2001. Borrowing on credit cards fell $2.9 billion in January after four months of gains.
Many economists believe the rise in borrowing is a sign that consumers are feeling more confident about the economy. But consumers are also borrowing more at a time when their wages have not kept pace with inflation.