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Topic: American Eagle Union Blasts AMR Over Republic
Username: cosyr
Posted 2013-01-25 16:36:49 and read 10394 times.

Just came across this, and while I get that he needs to voice his dissappointment, it sounds kind of like a petulant child complaining about the candy bar they didn't get in the grocery store check out.

http://aviationblog.dallasnews.com/2...-flying-to-republic-airlines.html/

I thought it was already known that AMR was going to take some competing Eagle services before this announcement. Why is this so shocking to him?

[Edited 2013-01-25 16:37:47]

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: jfk777
Posted 2013-01-25 16:42:28 and read 10376 times.

Isn't the existing "American Eagle" going to get spun-off intoa separate airline from AMR and AA ?

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: N62NA
Posted 2013-01-25 17:02:50 and read 10241 times.

Sometimes the comments posted are as interesting as the story. Here's one:

I guess it is ok for eagle to take flying away from American then right? What goes around comes around.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: norcal
Posted 2013-01-25 17:04:04 and read 10225 times.

Quoting cosyr (Thread starter):

Just came across this, and while I get that he needs to voice his dissappointment, it sounds kind of like a petulant child complaining about the candy bar they didn't get in the grocery store check out.

Well considering that they took $43 million per year from the pilots in order to be AMR's primary feed provider it seems rather disingenuous of AMR to keep awarding flying to other regionals. Consider the timeline too:

- Eagle votes in a concessionary contract, the following week AMR announces the closure of LAX crew base and use of SkyWest and ExpressJet for feed

- AMR tells Eagle union leadership that they need to vote in the 8 year concessionary contract to be competitive AND give AMR known and stable labor costs. Then AMR awards a huge amount of flying in Eagle's largest base to a carrier that has pilots that are itching to strike and are in heated contract negotiations. There is nothing stable and known about Republic's labor costs.

- Eagle just put up its best performance numbers last year and AMR decides to reward that hard work by outsourcing.

- AMR management tells Eagle pilots that they can't see the fleet plan because it's all NDA, yet they have no problem telling Republic, SkyWest, and ExpressJet what they will be doing

- AMR spends a ton of energy and time talking to the press about how they are going to spin off Eagle and (before the concessionary contract was voted in) talked publicly about how Eagle isn't cost competitive and how they want to diversify feed. Not only does AMR destroy employee morale at Eagle with their comments in the press but they also destroy Eagle's ability to attract the few remaining qualified pilots out there for new hire classes. As a result Eagle pilots are now being worked much harder in order to cover flying despite the carrier shrinking.


All in all AMR has taken just about opportunity they can screw over Eagle employee's despite all of their sacrifices. The timing of their decisions are all very poor and just speak to the general lack of respect that they have for the people who do work at Eagle.

Employees at Eagle think they are the next Comair. Base on what I've seen I'd have to agree with them Read a pilot forum and see the other side of the story.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: kcrwflyer
Posted 2013-01-25 17:30:34 and read 10057 times.

Quoting norcal (Reply 3):
- AMR tells Eagle union leadership that they need to vote in the 8 year concessionary contract to be competitive AND give AMR known and stable labor costs. Then AMR awards a huge amount of flying in Eagle's largest base to a carrier that has pilots that are itching to strike and are in heated contract negotiations. There is nothing stable and known about Republic's labor costs.

But what is the nature of the contract with Republic? AA is probably locked into a price with them, so as far as AA is concerned, what THEY are paying is stable. It's typically the regional carrier that is taking risk when locking in a contract, provided they're in a turbulent labor situation.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: LAXintl
Posted 2013-01-25 17:38:15 and read 10018 times.

AE President Garton explained it.

Here is a quote from his employee memo;

Although Eagle received a copy of the RFP, we were not in a position to meet a key requirement of securing and financing large regional jets in the timeframe requested.


Simply put AE has no money to go and compete for the business.
In otherwords since AE itself is in BK, and is constrained with what it can do at the moment until it fully manages restructures itself.

=

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: norcal
Posted 2013-01-25 17:58:10 and read 9886 times.

Quoting kcrwflyer (Reply 4):
But what is the nature of the contract with Republic? AA is probably locked into a price with them, so as far as AA is concerned, what THEY are paying is stable. It's typically the regional carrier that is taking risk when locking in a contract, provided they're in a turbulent labor situation.


If Republic gets released for strike or starts operating slowly that could drastically affect AMR. Furthermore, part of the Eagle contract is that their longevity will be adjusted to match the two lowest regionals in 4 years. That provides incredibly stable and low costs by ensuring that Eagle is amongst the lowest compensated pilots in the industry.

Furthermore the vast majority of super senior Eagle guys will have the opportunity to flow very shortly.

Finally every dollar that AMR sends to RAH is lost forever, all of Eagle's "profits" stay in house since they are wholly owned subsidiary.

Quoting LAXintl (Reply 5):
Simply put AE has no money to go and compete for the business.
In otherwords since AE itself is in BK, and is constrained with what it can do at the moment until it fully manages restructures itself.

AE = AMR and AMR has a ton of cash in the bank plus the ability to gain financing. They managed to increase the AA order book during bankruptcy.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: commavia
Posted 2013-01-25 18:06:09 and read 9835 times.

Quoting N62NA (Reply 2):
I guess it is ok for eagle to take flying away from American then right? What goes around comes around.

Well I guess that comment is interesting, if misguided. No, Eagle can't "take flying away" from AA until they are contractually freed to do so. Eagle is bound by legally-enforceable contracts to provide a specific amount of capacity to AA over a specific amount of time. Until Eagle and AA formally renegotiate that contract, or Eagle successfully rejects it in bankruptcy (which of course won't happen because it's still owned by AMR), Eagle can't "take flying away" from AA. In this case AA is the customer, and Eagle the vendor.

Quoting norcal (Reply 3):
Well considering that they took $43 million per year from the pilots in order to be AMR's primary feed provider it seems rather disingenuous of AMR to keep awarding flying to other regionals.

Why is that disingenuous?

First off, nobody ever told Eagle employees that taking concessions was a guarantee that they would continue to maintain a near-monopoly over AMR regional feed. In fact, quite the opposite. AMR has been quite clear - both in public and apparently in private, too - about their desire to use competitive bidding to reduce the cost of regional feed, just as Delta, United and USAirways have been doing for years.

Second, it doesn't appear - based on Garton's comments to Eagle employees - that the major issue here may even have been cost. It seemed to largely center on the fact that Eagle simply couldn't satisfy a key RFP requirement relating to financing new aircraft. Hardly surprising considering that Eagle is bankrupt. But once Eagle is no longer in Chapter 11, how do we know it won't be cost-competitive, and be able to successfully compete for additional large RJ AMR feed? Who's to say?

If AMR/Eagle management had told the pilots that all they had to do was vote yes on concessions, and AMR would keep steering all AA regional feed to them, then this would be a case of disingenuous dishonesty. But that didn't happen here.

While ALPA may not like this, everyone on all sides acknowledges that this was not a surprise to anyone.

Quoting norcal (Reply 3):
Eagle votes in a concessionary contract, the following week AMR announces the closure of LAX crew base and use of SkyWest and ExpressJet for feed

... which, while painful, is not supposed to lead to a single layoff among Eagle pilots. Displacements and lots of commuting and deadheading? Sure. But no layoffs. It's unfortunate and disruptive to a lot of good Eagle pilots, but that is the difficult reality of the U.S. regional airline industry these days.

Quoting norcal (Reply 3):
AMR tells Eagle union leadership that they need to vote in the 8 year concessionary contract to be competitive AND give AMR known and stable labor costs.

Right ... and that was untrue somehow? Eagle does need to be cost competitive and AMR - which still owns Eagle for now - does need known and stable labor costs. You can argue over the length of the contract or the concessions demanded, but the mere statement that Eagle needs competitive and stable costs is hardly earth-shattering.

Quoting norcal (Reply 3):
Then AMR awards a huge amount of flying in Eagle's largest base to a carrier that has pilots that are itching to strike and are in heated contract negotiations. There is nothing stable and known about Republic's labor costs.

Again - welcome to the U.S. regional airline industry, circa the last decade. Mesa, GoJet, Colgan, Mesaba, Pinnacle, Comair, and on and on. Uncertainty and instability are nothing new, and that doesn't seem to be slowing the mainline operators down one bit in setting this carriers off against one another to get the lowest price, no matter the "cost." It may be unfortunate and painful for employees, and may well even be short-sighted in terms of long-term economic impact, but cost reduction of regional feed rules the day. It's "worked" to date at United and USAirways, and Delta has played its regionals off against each other masterfully time and again - AA has no choice but to compete with that.

Quoting norcal (Reply 3):
Eagle just put up its best performance numbers last year and AMR decides to reward that hard work by outsourcing.

It's business. Eagle is now going to have to compete with other regional operators for this feed for the first time, and unfortunately for Eagle, the basis of competition is in virtually every case going to be cost. Again - welcome to regional airline America 2013. Eagle's recent performance has been impressive, and indeed as I've said I really do think Eagle generally does quite a good job operationally and as a customer relative to other regionals.

Quoting norcal (Reply 3):
AMR management tells Eagle pilots that they can't see the fleet plan because it's all NDA, yet they have no problem telling Republic, SkyWest, and ExpressJet what they will be doing

First off, how do you know AMR shared its regional fleet plan with Republic, SkyWest and ExpressJet? They issued an RFP publicly, but how do you know it contained AMR's regional fleet plan? And how do you know AMR didn't make those other carriers sign an NDA, too? (Indeed, I'm sure AMR did make all those carriers sign NDAs before getting into serious negotiations, whether they saw the fleet plan or not.)

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: rfields5421
Posted 2013-01-25 18:07:12 and read 9831 times.

Quoting jfk777 (Reply 1):
Isn't the existing "American Eagle" going to get spun-off intoa separate airline from AMR and AA ?

AMR tried to sell AE - and nobody wanted it. Wrong aircraft mix, bad potential contract terms. AA would refuse to guarantee a minimum contract term with AE to anyone who might buy the subsidary airline.

The AMR board considered spinning off AE into a separate company, but the financials didn't work out. The AMR major stockholders didn't like the 'loss of value' of AMR if AE was spun off for stock only in the new airline - i.e. no cash paid to AMR.

AE is pretty much destined to a much reduced role, or possible closure - the likely option in my personal opinion.

Quoting norcal (Reply 3):
Employees at Eagle think they are the next Comair. Base on what I've seen I'd have to agree with them

I fully agree.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: commavia
Posted 2013-01-25 18:10:43 and read 9812 times.

Quoting norcal (Reply 6):
If Republic gets released for strike or starts operating slowly that could drastically affect AMR.

True. Again - uncertainty and instability. Welcome to regional airline America 2013.

Quoting norcal (Reply 6):
Furthermore the vast majority of super senior Eagle guys will have the opportunity to flow very shortly.

True. That alone is going to make a huge difference for Eagle's costs. At least a few hundred Eagle pilots are probably going to have rights to flow up to mainline in the next few years.

Quoting norcal (Reply 6):
Finally every dollar that AMR sends to RAH is lost forever, all of Eagle's "profits" stay in house since they are wholly owned subsidiary.

Right, but if Eagle is less cost-competitive overall than Republic, the economic value overall is destroyed, and that's a less attractive proposition for AMR. Put another way, if Republic can provide the regional feed at a lower cost - including a lower capital cost from lower borrowing costs on these jets - AMR will expect to see some of those savings passed to it through a lower cost charged by Republic, and that lower expense outweighs any benefit from "keeping in the house" Eagle's higher-cost feed.

Quoting norcal (Reply 6):
AE = AMR and AMR has a ton of cash in the bank plus the ability to gain financing. They managed to increase the AA order book during bankruptcy.

But perhaps AMR feels it has better places to deploy cash than financing more jets for Eagle? Plus in this case apparently AMR's RFP indicated AMR's preference for the regional - not AMR - to finance these assets and hold them on their books. It appears as though AMR didn't want to finance these planes with its own cash - for Eagle or anyone else.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: LAXintl
Posted 2013-01-25 18:15:52 and read 9788 times.

Quoting norcal (Reply 6):
AE = AMR and AMR has a ton of cash in the bank plus the ability to gain financing. They managed to increase the AA order book during bankruptcy.

AE going forward needs to stand on its own two feet. That is the point here.

Papa AMR need not place chain around its neck for $4.0bil in aircraft financing.

Soon enough AE will need to learn to prosper or fail on its own merit and not rely on a AMR automatic backstop.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: Kcrwflyer
Posted 2013-01-25 18:22:45 and read 9741 times.

Quoting norcal (Reply 6):
Finally every dollar that AMR sends to RAH is lost forever, all of Eagle's "profits" stay in house since they are wholly owned subsidiary.

You're over thinking this.

Quoting commavia (Reply 9):
Right, but if Eagle is less cost-competitive overall than Republic, the economic value overall is destroyed, and that's a less attractive proposition for AMR. Put another way, if Republic can provide the regional feed at a lower cost - including a lower capital cost from lower borrowing costs on these jets - AMR will expect to see some of those savings passed to it through a lower cost charged by Republic, and that lower expense outweighs any benefit from "keeping in the house" Eagle's higher-cost feed.

Yes, but lets break this down to its most basic level.


Norcal,

lets say AA is going to bring 60 passengers OKC-DFW, all connecting to the same places and bringing the same amount of revenue. If it costs AA $4,000 to bring them into their network on Eagle, and $3,800 to bring them into the network on republic, republic is a better carrier for them on the route (financially).Owning eagle doesn't mean that they're "paying themselves" to fly an eagle flight. The operating costs of the route are being spent regardless.

And yes... there are dozens of other variables that you could drag into this if you were a glutton for punishment, but at the end of the day it boils down to the overall cost to provide feed.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: ouboy79
Posted 2013-01-25 19:24:21 and read 9482 times.

Quoting Kcrwflyer (Reply 11):
lets say AA is going to bring 60 passengers OKC-DFW, all connecting to the same places and bringing the same amount of revenue. If it costs AA $4,000 to bring them into their network on Eagle, and $3,800 to bring them into the network on republic, republic is a better carrier for them on the route (financially).Owning eagle doesn't mean that they're "paying themselves" to fly an eagle flight. The operating costs of the route are being spent regardless.

Except OKC-DFW is all mainline, but I get what you are saying.  

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: infiniti329
Posted 2013-01-26 06:18:40 and read 8830 times.

I personally believe this undercutting will eventually blow up in mainline carriers faces. In this industry at this point in time it not like airlines have an unlimited supply of pilots, the things you need to actually fly these routes. Reality will soon set in once the mainline gobble up the vast majority of regional pilots to replace their own who must retire... thats when things will get interesting.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: ItalianFlyer
Posted 2013-01-26 07:02:39 and read 8718 times.

Question for you all: On the surface, so you think AMR is realigning its relationship with MQ along the lines of the AS/QX model? Here is a link to a CAPA article from 2010.....take a look at the narrative focusing on the QX reorganization, there are some interesting parallels.

http://centreforaviation.com/analysi...ations-to-drive-efficiencies-31729

" Horizon reorganisation
Newly installed Horizon President Glenn Johnson reported on his vision for the regional carrier, saying that, although the company has many strengths, its weakness lies in its inability to deliver on profitability. “While we are making progress, we can and must achieve a 10% margin,” he said. “For the 12 months ended 30 Jun our margin was 5.1%. To continue closing the gap and accelerating the pace of improvement, the Horizon leadership team is evaluating the current business model to determine how best to go about making Horizon a financial success and what changes may be necessary to accomplish this.”

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: xdlx
Posted 2013-01-26 08:55:16 and read 8260 times.

Writing is in the wall...

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: Revelation
Posted 2013-01-26 09:49:55 and read 7818 times.

Quoting commavia (Reply 9):
Quoting norcal (Reply 6):
AE = AMR and AMR has a ton of cash in the bank plus the ability to gain financing. They managed to increase the AA order book during bankruptcy.

But perhaps AMR feels it has better places to deploy cash than financing more jets for Eagle? Plus in this case apparently AMR's RFP indicated AMR's preference for the regional - not AMR - to finance these assets and hold them on their books. It appears as though AMR didn't want to finance these planes with its own cash - for Eagle or anyone else.

I'm not sure which orders happened during BK, but I have read the big thing AA got from the MAX+NEO deals was financing from the vendor cheaper than the debt-burdened AA could get from the banks. AA called that out as a big reason why they were doing a wholesale swap-out of the MDs after holding on to them for so long.

Quoting infiniti329 (Reply 13):
Reality will soon set in once the mainline gobble up the vast majority of regional pilots to replace their own who must retire... thats when things will get interesting.

One can argue that "reality" is what AA management has been after, which means extracting as much as it can out of the current state of play in the regional industry. Indeed that may bite them later, but that's tomorrow's problem, and tomorrow there may be other totally unforeseen variables at play.

There definitely are macro-economic factors at play. The US and world economy still isn't healthy, air fares are continuously rising which continuously makes air travel less attractive, the US airline industry is still largely shielded from international capital and competition domestically, etc.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: apodino
Posted 2013-01-26 10:13:55 and read 7643 times.

Quoting norcal (Reply 6):


If Republic gets released for strike or starts operating slowly that could drastically affect AMR. Furthermore, part of the Eagle contract is that their longevity will be adjusted to match the two lowest regionals in 4 years. That provides incredibly stable and low costs by ensuring that Eagle is amongst the lowest compensated pilots in the industry.

AMR isn't going to be the only ones drastically affected. A huge portion of the US operation at both PHL and DCA is Republic 170's. If there is a strike, US does not have a bunch of extra 70 seat lift in those places, and the only other comporable planes with that capacity at US are the YV 900's and the JI 700's, but those numbers are so limited that US's route structure is going to take a serious hit.

UA and DL both have the Shuttle America lift that would also be affected by this, and because their structure is more spread out, they won't be impacted as much, but they will still be impacted. UA at ORD will certainly take a hit, and I believe Shuttle has a good amount of LGA feed in their network. This will affect everyone in this country, save for Alaska, and the three LCCs that don't codeshare, WN, B6, and NK.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: lightsaber
Posted 2013-01-26 10:40:27 and read 7407 times.

Quoting LAXintl (Reply 5):
Simply put AE has no money to go and compete for the business.
In otherwords since AE itself is in BK, and is constrained with what it can do at the moment until it fully manages restructures itself.

It is sad when a company has to be managed for cash flow #1, but at some point that must be a consideration.

Quoting norcal (Reply 3):
Employees at Eagle think they are the next Comair. Base on what I've seen I'd have to agree with them

I do too. Where else will AMR be able to come up with the money to buy new planes? I suspect MRJs would be available for financing, but the competitors might have a better chance.

Quoting LAXintl (Reply 10):
AE going forward needs to stand on its own two feet. That is the point here.

That is almost impossible in this environment when the competition is being managed to be the 'last man standing' in a market where there are several players too many and AE has far too many 50-seaters in their portfolio.

Quoting Revelation (Reply 16):
I'm not sure which orders happened during BK, but I have read the big thing AA got from the MAX+NEO deals was financing from the vendor cheaper than the debt-burdened AA could get from the banks.

But it is not all dark. AE would be a very interesting deal, but only for a vendor willing to take 50-seaters as a 'down payment.'

Lightsaber

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: B727FA
Posted 2013-01-26 11:21:44 and read 7122 times.

I'm sorry--I just had to laugh at the indignant charge that AMR is "outsourcing regional flying." What does he think Eagle is?

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: Aerowrench
Posted 2013-01-26 11:41:17 and read 6983 times.

Quoting norcal (Reply 3):

- Eagle votes in a concessionary contract, the following week AMR announces the closure of LAX crew base and use of SkyWest and ExpressJet for feed

I believe the Eagle vote was of very little significance regarding the AMR CPA with SkyWest Inc. It just so happened to coincide with the BK judge dissolving the AA pilot collective agreement which allowed for much greater leeway in regional flying. The LAX base closure was simply to consolidate operations.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: ripcordd
Posted 2013-01-26 11:50:19 and read 6908 times.

When BK is done AE will be on its own and if they dont lower their costs they will be out of business. AE has been a huge drain on AMR for years yes officially AE always made money and AA never did but this was done with creative accounting to keep AA employees in line when it came to contracts we cant we are not making money bs many years AE was getting profit sharing when AA did not.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: norcal
Posted 2013-01-27 04:41:13 and read 5078 times.

Quoting commavia (Reply 7):
First off, nobody ever told Eagle employees that taking concessions was a guarantee that they would continue to maintain a near-monopoly over AMR regional feed. In fact, quite the opposite.

Check my choice of words, I said primary feed provider not monopoly. According to their new concessionary contract AMR must furlough protect at least 2000 Eagle pilots, climbing to 2300 in coming years. That's 200-230 aircraft based on historic staffing numbers.

Furthermore if/when a merger with US does occur, 95% of the Eagle pilot list is guaranteed job protections. At the rate that AMR is giving away flying it looks likely that they plan on breaking that portion of the contract.

Quoting commavia (Reply 7):
Second, it doesn't appear - based on Garton's comments to Eagle employees - that the major issue here may even have been cost. It seemed to largely center on the fact that Eagle simply couldn't satisfy a key RFP requirement relating to financing new aircraft.

How can Eagle get financing on its own when its still owned by AMR? How will AMR meet the employment obligations it promised Eagle employees when they signed concessionary deals?

Quoting commavia (Reply 7):
Right ... and that was untrue somehow? Eagle does need to be cost competitive and AMR - which still owns Eagle for now - does need known and stable labor costs. You can argue over the length of the contract or the concessions demanded, but the mere statement that Eagle needs competitive and stable costs is hardly earth-shattering.

Prior to bankruptcy when AMR was planning to spin off Eagle they wrote in SEC filings that they pay "market rate" for Eagle feed and that Eagle had generated a profit for AMR most years. That was before the concessionary contracts signed by all the labor groups that not only made immediate improvements (the pilot's alone gave $43 million a year ) but also guaranteed long term stable costs that reset to match the lowest carriers in the industry every few years.

Quoting commavia (Reply 7):
First off, how do you know AMR shared its regional fleet plan with Republic, SkyWest and ExpressJet? They issued an RFP publicly, but how do you know it contained AMR's regional fleet plan? And how do you know AMR didn't make those other carriers sign an NDA, too? (Indeed, I'm sure AMR did make all those carriers sign NDAs before getting into serious negotiations, whether they saw the fleet plan or not.)

I didn't say they showed those carriers the entire plan, merely that they told them what they'd be doing. AMR knows the plan and they've gone so much as share it with Eagle ALPA leadership but they are refusing to allow them to pass on what Eagle will be doing.

My guess is that they are planning on breaching the employment guarantee section of the contract or they are purposefully keeping morale as low as possible to entice people to leave.

If they do know the plan, why wait and create a ton on uncertainty in the lives of their employees? Why release all the bad news at the worst possible moments, like the SkyWest flying after Eagle voted in concessions.

They did make RAH sign an NDA, but they nearly spilled the beans in December when they released a press release saying, They'd be doing large RJ flying for AMR," that quickly got corrected to "We'll be in a competitive position to bid for AMR flying."

Quoting LAXintl (Reply 10):
AE going forward needs to stand on its own two feet. That is the point here.

Papa AMR need not place chain around its neck for $4.0bil in aircraft financing.

Soon enough AE will need to learn to prosper or fail on its own merit and not rely on a AMR automatic backstop.

According to the SEC filings that AMR posted when they were trying to spin Eagle off they said Eagle was profitable most years and that AMR paid market rate for Eagle's feed. That was before concessions were taken by every Eagle group with stipulations that pegs Eagle's costs to the lowest regionals out there every few years. Eagle can and does stand on its own and isn't a drain on AMR.

Furthermore how can Eagle get it's own financing when it's a part of AMR? It can't hold on to Eagle and then use that line when RFPs come up for bid. They are contractually obligated to employ a certain number of Eagle pilots unless they plan on breaking that contract.

Quoting infiniti329 (Reply 13):
I personally believe this undercutting will eventually blow up in mainline carriers faces. In this industry at this point in time it not like airlines have an unlimited supply of pilots, the things you need to actually fly these routes. Reality will soon set in once the mainline gobble up the vast majority of regional pilots to replace their own who must retire... thats when things will get interesting.

Agreed, in their shortsightedness they are creating their own pilot shortage by driving down wages while training costs are going up. They also make life incredibly miserable for the regional employees in order to squeeze a few more pennies out of them every few years.

People, particularly pilots, are figuring it out and doing other things. There are a ton of internet forums out there for pilots that people are reading and now learning that the career isn't what they thought it was based on that fancy flight school brochure.

In the coming years the regionals are going to struggle to staff these planes placing the entire feeder system in harms way. They'll be temporary relief in the form of 50 seat reduction but that won't last, particularly when the majors will need a 1,000 pilots a year to staff their current flying. That'll have drastic effects on the mainline carriers looking to fill their widebodies for profitable international flying. However as is typically the case in corporate America, next quarter is all that matters and the long term effects mean nothing.

I honestly can't wait to see the Delta, United, American, and US CEOs freak out when their precious cheap labor systems implode. It'll be hilarious to watch and poetic justice for all the years of chapter 11 and RLA abuse.

And if you think the Eagle pilots are the only upset ones check out AMR's new darling RAH

http://www.rahcontractnow.org

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: commavia
Posted 2013-01-27 05:37:55 and read 5018 times.

Quoting norcal (Reply 22):
Check my choice of words, I said primary feed provider not monopoly.

Then let me revise my choice of words. Nobody ever told AA employees that if they gave concessions that would guarantee that Eagle remains the "primary feed provider" for AMR. Actually, it was quite the opposite. Everyone involved has known for quite some time that feed diversification was coming. It was no secret.

Quoting norcal (Reply 22):
How can Eagle get financing on its own when its still owned by AMR?

AMR Eagle is a legal entity that can enter into financing agreements, but only when AMR - its owner - wants Eagle to. Nonetheless, that's not what happened here. The reason Eagle didn't bid for this flying wasn't because AMR didn't want Eagle to get financing for new jets. It was because Eagle, and AMR, are in bankruptcy, and thus it would be more difficult for both of them to get financing right now compared to a solvent concern such as Republic.

Quoting norcal (Reply 22):
At the rate that AMR is giving away flying it looks likely that they plan on breaking that portion of the contract.

So does that furlough protection overlap with the guys who have flow-up rights? And either way, why don't we wait until AMR actually breaches a legally-enforceable contract? Right now you're guessing and assuming - let's see if AMR really does plan on breaking a contract it just signed.

Quoting norcal (Reply 22):
Prior to bankruptcy when AMR was planning to spin off Eagle they wrote in SEC filings that they pay "market rate" for Eagle feed and that Eagle had generated a profit for AMR most years.

Both of which may be true. The key, though, is Eagle's profit margin. If Eagle is less profitable than its peer competitors, then AMR's regional subsidiary is not as efficient as it needs to be.

Quoting norcal (Reply 22):
I didn't say they showed those carriers the entire plan, merely that they told them what they'd be doing.

Well they've told the Eagle pilots "what they'll be doing" - cutting costs and diversifying regional feed. They haven't however, shared the fleet plan with the Eagle pilots, true. But again, we don't know if they did or didn't share it with the carriers responding to the RFP, either. All we know for sure is that they showed them a need for 53 airplanes. Beyond that, again, you're simply speculating about what they did or didn't show Republic.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: ripcordd
Posted 2013-01-27 08:07:34 and read 4846 times.

Sure Eagle was profitiable NORCAL and AA was paying market rate but I'm sure they hide a lot of costs that was charged to AA at least in hubs FUEL/Employee bus/Catering/Equipment they proped AE up for many many years and AA has paid the price for it.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: N766UA
Posted 2013-01-27 08:08:58 and read 4933 times.

Quoting LAXintl (Reply 10):
Soon enough AE will need to learn to prosper or fail on its own merit and not rely on a AMR automatic backstop.

I don't understand why Eagle is being painted as the "bad guy" here for doing all of American's regional flying. Competitive bidding, effectively whoring out your name to literally anyone and everyone, has destroyed the industry. It's a big part of why the profession of piloting is in the toilet right now.

Maybe it's necessary "these days," and Eagle can't avoid that it's going to have to alter its business plan to stay afloat, but I, for one, feel sympathy for Eagle. They were the last bastion of the way an airline was supposed to be run, where airline executives cared who flew with their logo on the tail, and weren't just out bargain hunting.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: ripcordd
Posted 2013-01-27 09:43:52 and read 4842 times.

Exec's if they cared about who flew for them they would have done away with Eagle at ORD along long long time ago. Try landing at ORD on AE and waiting for an open gate, watch their workers out the window handle your bags you will think twice. And when the customers complain to their friends that their bag was lost they said they flew AA not AE. I'm sure in small stations AE does a wonderful job but at least from my fligts on AE at ORD it's as bad as it gets.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: commavia
Posted 2013-01-27 10:19:53 and read 4878 times.

Quoting ripcordd (Reply 24):
Sure Eagle was profitiable NORCAL and AA was paying market rate but I'm sure they hide a lot of costs that was charged to AA at least in hubs FUEL/Employee bus/Catering/Equipment they proped AE up for many many years and AA has paid the price for it.

No costs were "hidden." The contractual relationship between AA mainline and Eagle was shifted several years ago to more closely align with the way that regional feeder agreements are accounted for in the rest of the industry, where almost all the regional feed is non-owned. In that case, AA pays Eagle a set fee per departure, Eagle is responsible for controlling costs in order to make a profit given that set fee, and AA mainline is responsible for scheduling, marketing and branding.

Quoting N766UA (Reply 25):
I don't understand why Eagle is being painted as the "bad guy" here for doing all of American's regional flying.

If anybody is making Eagle out to be the "bad guy" here (which I don't think anyone is), they shouldn't be. Eagle is just trying to make money in an extremely low-margin business, and it's tough.

Quoting N766UA (Reply 25):
Competitive bidding, effectively whoring out your name to literally anyone and everyone, has destroyed the industry.

... and yet, it is the regional industry. Like so much else that has happened at AA in the last decade, don't hate the player, hate the game. Whether any of us like it or not, that is the reality of the situation. Just take one look at what Delta has done with and to its regional operators in the last few years to see crystal clearly why AA has no choice but to be brutal with its regional feed, and thus why Eagle has no choice but to be competitive. It may be unfortunate for the good people who do good work at these airlines, but it is reality.

Quoting N766UA (Reply 25):
I, for one, feel sympathy for Eagle. They were the last bastion of the way an airline was supposed to be run, where airline executives cared who flew with their logo on the tail, and weren't just out bargain hunting.

I wholeheartedly agree. As I've said, I have generally found Eagle to provide a better overall regional product than many other regional operators, which I believe has - to this point - likely been a result of closer operational and service integration with mainline brought on by common ownership (AA and Eagle both being subsidiaries of AMR). Nonetheless, that generally better product and closer integration has come at a cost - and that cost is simply no longer justifiable given the economic pressures AMR is under and the competitive realities that AMR faces.

Quoting ripcordd (Reply 26):
Try landing at ORD on AE and waiting for an open gate

I don't really blame Eagle for that, though. Eagle gets to use the space that AA gives them - Eagle has slowly been creeping out of G and onto H and K for the last decade as Eagle has grown and mainline shrunk at ORD. If Eagle is chronically gate-constrained, perhaps that means that it's time for Eagle to move a little further into H/K/L. Frankly, with what is about to happen with more large regionals flowing into ORD, I think that's inevitable.

Quoting ripcordd (Reply 26):
watch their workers out the window handle your bags you will think twice

Honestly I think you could say that about almost any U.S. airline. I have sat at many a window and watched many a ramper fling many a bag onto many a bag belt with somewhat less than tender loving care. Given the pressure rampers are under these days to get stuff in and out, and the door closed, as quickly as possible, that's probably unavoidable.

Quoting ripcordd (Reply 26):
I'm sure in small stations AE does a wonderful job but at least from my fligts on AE at ORD it's as bad as it gets.

Everyone has their own experience. I do often find Eagle (and most airlines in general) service better in small outstations than at big, busy, chaotic hubs, but I've never found Eagle particularly bad - or at least particularly worse than other airlines, let alone other regional airlines - at ORD or other hubs. In my personal experience, the worst regional experience I've ever had in my life was Delta Connection at JFK - now that was "as bad as it gets," at least for me.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: LAXintl
Posted 2013-01-27 10:28:52 and read 4855 times.

Quoting norcal (Reply 22):
Furthermore how can Eagle get it's own financing when it's a part of AMR?

Same way AA can get its own financing.

However being in BK AMR clearly does not want the books to be saddled with additional long term debt.

Quoting N766UA (Reply 25):
I don't understand why Eagle is being painted as the "bad guy" here for doing all of American's regional flying.

Eagle perse might not be the bad guy, but its like an overweight kid. I suppose we can blame the parents for getting where it is today. For various reasons AA was stuck with relying on AE all these years and result things became bloated while the rest of the industry was on a diet.

Eagle even post BK still has lots of legacy overhead, relative senior (read costly) work force, and other liabilities that make it far from best in class as an efficient producer of ASMs.

Quoting N766UA (Reply 25):
Competitive bidding, effectively whoring out your name to literally anyone and everyone, has destroyed the industry

Competitive bidding is what keeps business lean and honest. Certainly as both a consumer purchasing airline seats and a business man I appreciate getting a product or service at or competitive market rates.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: norcal
Posted 2013-01-27 10:38:30 and read 4832 times.

Quoting commavia (Reply 23):
Then let me revise my choice of words. Nobody ever told AA employees that if they gave concessions that would guarantee that Eagle remains the "primary feed provider" for AMR. Actually, it was quite the opposite. Everyone involved has known for quite some time that feed diversification was coming. It was no secret.

Eagle has to be the primary feed provider based on the new scope language and the promised furlough protection to Eagle pilots. The numbers don't add up otherwise.

Some diversification was always expected but what is troubling is the level of diversification and the manner in which the company is doing it. They are piling on bad news on top of a group of people that have sacrificed a lot. They refuse to release the future fleet plan to Eagle, they have it, Eagle ALPA has seen it but they are bound by NDA not to reveal it per AMR's wishes.

Eagle is going to become about a 230 aircraft fleet based on the employment figures (unless AMR is going to violate the contract). The ERJs are going away, so they'll have to make some kind of announcement soon

Quoting commavia (Reply 23):
It was because Eagle, and AMR, are in bankruptcy, and thus it would be more difficult for both of them to get financing right now compared to a solvent concern such as Republic.

Perhaps that's true, but they have a fleet plan and releasing that to the employees would still be fine. They could simply say, "Eagle will operate x number of large regional jets as soon as financing is secure," or even a simple, "Despite these recent announcements, new jets are coming to Eagle, we have a plan and once we figure out the financing the aircraft will be ordered." Instead it is simply silence except for announcements for other carriers that come out at the best possible moments to ruin morale.

That's still vague enough to allow the company to negotiate with regional jet manufacturers but also allows them to provide a sliver of hope.

Quoting commavia (Reply 23):
Right now you're guessing and assuming - let's see if AMR really does plan on breaking a contract it just signed.

It's AMR, their track record with employee relations is abysmal.

Quoting ripcordd (Reply 24):

Sure Eagle was profitiable NORCAL and AA was paying market rate but I'm sure they hide a lot of costs that was charged to AA at least in hubs FUEL/Employee bus/Catering/Equipment they proped AE up for many many years and AA has paid the price for it.

AMR has always payed a shell game with shifting finances around in order to argue Eagle is cheap to AA pilots and then tell Eagle pilots they are too expensive in order to force concessions.

However they told the SEC their costs are in line with the rest of the industry when they were looking to spin Eagle off. Now it's fraudulent to say that and then later spill a whole bunch of additional hidden costs to potential investors after Eagle is spun off, that's misrepresentation. The numbers given to the SEC are likely accurate.

Quoting N766UA (Reply 25):
Maybe it's necessary "these days," and Eagle can't avoid that it's going to have to alter its business plan to stay afloat, but I, for one, feel sympathy for Eagle. They were the last bastion of the way an airline was supposed to be run, where airline executives cared who flew with their logo on the tail, and weren't just out bargain hunting.

Eagle employees did give back a heck of a lot to the company in order to match the most competitive regionals in the industry. Their longevity and pay matching to the two lowest regionals ensures they will continue to remain amongst the lowest compensated work groups in the industry.

Quoting ripcordd (Reply 26):
Exec's if they cared about who flew for them they would have done away with Eagle at ORD along long long time ago. Try landing at ORD on AE and waiting for an open gate, watch their workers out the window handle your bags you will think twice

You can thank the bean counters at AMR for crap like that (it happens at all regionals though). You get exactly what you pay for.

Last year for example Eagle violated the DOT rule on about 20 flights, the fines could have been $30 million if the DOT actually had teeth. It occurred because the ramp was understaffed because of cost cutting. It upsets customers and frustrates employees because the employees are the ones who are ultimately told they are the problem, yet every airline pisses away a ton of money every day because of inefficiencies. Broken equipment, waiting on gates, low staffed ramps, etc.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: commavia
Posted 2013-01-27 10:49:32 and read 4790 times.

Quoting norcal (Reply 29):
Eagle has to be the primary feed provider based on the new scope language

Please provide specifics. I'm not entirely sure if you are referring to the mainline APA or Eagle ALPA contracts, but either way, what in the "new scope language" says that Eagle "has" to be the "primary" feed provider? And, for that matter, what in any recent news indicates that Eagle won't be the "primary" feed provider for AMR for the foreseeable future, whether contractually required or not? So far we know that by year-end AMR plans for Eagle to be operating 259 airplanes. So as of now that means Eagle will be flying 259 jets under contract to AMR, and RAH will potentially be fly a total of 68 (15 140s + 53 E175s). Seems pretty "primary" to me.

Quoting norcal (Reply 29):
The numbers don't add up otherwise.

Well, maybe they don't add up to you as you don't have all the information?

Quoting norcal (Reply 29):
The ERJs are going away

When? And says who? AMR recently outlined their plan to eliminate all 135 flying, but to my knowledge no plan has been specifically identified to get rid of the rest of Eagle's ~200 ERJs. They will of course leave at some point - that I don't disagree with - but we (or at least I) don't know when or at what rate. Do you know?

Quoting norcal (Reply 29):
Perhaps that's true, but they have a fleet plan and releasing that to the employees would still be fine.

But why release it and tip your hand with prospective bidders for other feed contracts, not to mention competitors? Does Delta or United or USAirways release detailed fleet plans years out into the future to their regional operators? No. Delta has spoken in generalities and rough numbers about reducing its regional fleet, but to my knowledge has never specifically spelled out, by aircraft type and operator, which airplanes are being added or being parked. I've learned more about those details from A.net than I have from anything officially released by Delta.

And the reason is obvious. Releasing that kind of information may well undermine AMR's negotiating position with prospective vendors. Information is one of the most valuable things in business, and it is only released when required, or when its commercially prudent. Perhaps AMR feels that at this point, given the deals it is trying to work out and the restructuring it is trying to complete, that releasing to the world a detailed plan of when it intends to add or remove regional aircraft is not prudent?

Quoting norcal (Reply 29):
However they told the SEC their costs are in line with the rest of the industry when they were looking to spin Eagle off.

Please provide a link to where AMR said that Eagle's "costs are in line with the rest of the industry." I wasn't aware that statement had been made. I thought AMR stated that Eagle's fee per departure was in line with competitors, if not necessarily its costs.

[Edited 2013-01-27 10:54:27]

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: norcal
Posted 2013-01-27 10:58:15 and read 4777 times.

Quoting commavia (Reply 27):

If you want proof of what AMR has been telling Eagle ALPA leadership about Eagle's roll as the primary feeder, check out this from Docket #6339 (RAH contract award)

10. Notwithstanding the Agreement, American Eagle Airlines, Inc.
(“American Eagle”) will continue to provide the majority of regional feed services to American.

American Eagle does not currently own or have access to 76-seat regional aircraft necessary to
satisfy American’s requirements. Entering into the Agreement with Republic is also consistent
with the Debtors’ objective to diversify their regional service providers to achieve a market
competitive cost.


They know the plan, why don't they release this information to the employees in a press release or company email to try and boost morale after destroying it? Why leave all of their employees guessing about their respective futures?

Quoting LAXintl (Reply 28):
Same way AA can get its own financing.

However being in BK AMR clearly does not want the books to be saddled with additional long term debt.

They won't do that with out permission from AMR....

Quoting LAXintl (Reply 28):
Eagle perse might not be the bad guy, but its like an overweight kid. I suppose we can blame the parents for getting where it is today.

Eagle essentially got liposuction and it's overweight condition was over exaggerated.

Quoting LAXintl (Reply 28):
For various reasons AA was stuck with relying on AE all these years and result things became bloated while the rest of the industry was on a diet.

SEC filings said they were paying market rate for Eagle feed before Eagle went on a massive diet

Quoting LAXintl (Reply 28):
Eagle even post BK still has lots of legacy overhead, relative senior (read costly) work force, and other liabilities that make it far from best in class as an efficient producer of ASMs.

1. Most senior guys will be flowing to AA soon
2. They just took huge pay cuts
3. They implemented a system that will match their pay and longevity every few years against the lowest regional carriers in the industry.

Their costs are going to be very low, perhaps that's why spin off talk has ceased. With costs that low AMR wouldn't want Delta or United to take advantage of an independent Eagle.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: commavia
Posted 2013-01-27 11:08:59 and read 4742 times.

Quoting norcal (Reply 31):
10. Notwithstanding the Agreement, American Eagle Airlines, Inc.
(“American Eagle”) will continue to provide the majority of regional feed services to American.

Okay - so there you go. Assuming that statement was legally-binding, then Eagle will continue to "provide the majority of regional feed."

If AMR says it plans for Eagle to continue to provide the majority of regional lift, and will furlough-protect Eagle pilots, and those two things are in no way incompatible with each other, than AMR can go right on further diversifying its feed, and furlough-protecting Eagle pilots, and still have Eagle provide the "majority" of regional feed. If Eagle pilots are furlough protected, the only way this diversification can harm them further is if AMR breaks that contract, and if they do, that's a grievance and lawsuit waiting to happen. Beyond that, the only argument that could be made is that by depriving Eagle of these jets, you're depriving these Eagle pilots of the change to move up and get a bump in pay. But again - who are we kidding? No Eagle pilot was ever promised that, nor do I think virtually any Eagle pilot thought this large RJ flying would be guaranteed to them. Quite the opposite!

So if all of this constitutes what AMR has stated, and if AMR has agreed to furlough protection for the Eagle pilots, then what's the problem? I struggle to figure out why we need entertain all of these conspiracy theories.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: Acey559
Posted 2013-01-27 12:22:32 and read 4643 times.

I posted this on another thread but I guess nobody read it. In a nutshell, what we're hearing is that the divestiture is off so we'll remain wholly owned. We will shrink over the next few years to align ourselves with the current target of 60% of AA feed, which is 220 airplanes. No furloughs are anticipated as attrition is expected to be high and the first of the 824 pilots flow to AA soon. We will end up about a 2200 pilot airline in the end and more feed contracts will be announced because we can't staff all the flying ourselves and of course there's the whipsaw AA wants to create. As you all know things can change but as of now, yes we are shrinking, no we are not being divested and no we are not sitting down. As for gate space at ORD, I'm based here and in the past month I've waited for a gate one time and that's because we landed 35 minutes early. It does happen but not that often, in my opinion.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: jfklganyc
Posted 2013-01-27 13:09:36 and read 4575 times.

Quoting norcal (Reply 29):
"Despite these recent announcements, new jets are coming to Eagle, we have a plan and once we figure out the financing the aircraft will be ordered." Instead it is simply silence except for announcements for other carriers that come out at the best possible moments to ruin morale.

That's still vague enough to allow the company to negotiate with regional jet manufacturers but also allows them to provide a sliver of hope.

Truth is, many of us see what we want to see in a situation...not what is really going on. I was at ACA doing an internship and we were waiting for UA to dole out new regional contracts. Each week flying went to Air Wisconsin or some other regional. And we waited and waited. And then poof, Indy Air.

Quoting Acey559 (Reply 33):
No furloughs are anticipated as attrition is expected to be high and the first of the 824 pilots flow to AA soon.

Honestly dude, I hate to burst your bubble. I would not count on 824 guys flowing to AA. Or any for that matter. I have witnessed this agreement in action over the years...and it isn't pretty. And when you mix in US East, US West...Eagle guys have always been and likely always will be better off going out and getting a job with a major that is hiring. There is no reason to wait for a flow through that may never happen.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: Acey559
Posted 2013-01-27 14:18:13 and read 4466 times.

Quoting jfklganyc (Reply 34):

I guess I should have been more clear, what I posted is what we're being told, not what I think will happen. I don't think the 824 will flow. Maybe a few if we get lucky but I'm not holding my breath for any appreciable number. I agree though, with many majors hiring in the somewhat near future there's no reason to wait to flow. I guess we'll find out soon how it all shakes out though because the first of the flows are supposed to go soon.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: N766UA
Posted 2013-01-27 17:32:41 and read 4290 times.

Quoting LAXintl (Reply 28):
Competitive bidding is what keeps business lean and honest. Certainly as both a consumer purchasing airline seats and a business man I appreciate getting a product or service at or competitive market rates.

I don't think that's true, or at least it doesn't need to be. If AMR maintained 100% ownership of Eagle, they could absolutely keep it "lean and honest" on their own. In fact, if you own your own airline, you're guaranteed to be able to run it exactly as you see fit. How on earth does bringing a 3rd [and 4th, 5th, 6th…] party, who may or may not be able to operate effectively and at the bid-upon rate, keep things more honest than that? And how can you call 15 different regional partners "lean?!"

This may be the way the business works now, but it's wrong. You could fly, for example, an entire day switching between itineraries on American, United, US Airways, Delta, and Alaska flights and only ever actually fly on ONE airline: Skywest. What's the point of competition at that point?! Just merge everyone into Skywest!

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: LAXintl
Posted 2013-01-27 18:19:29 and read 4232 times.

Quoting N766UA (Reply 36):
How on earth does bringing a 3rd [and 4th, 5th, 6th…] party, who may or may not be able to operate effectively and at the bid-upon rate, keep things more honest than that?

Very simple --- the market beats itself up to gain your business.

Having a company inhouse brings all types of added inefficiency - from billions in ownership of planes, employees with union issues, wage creep etc.

Nothing wrong with being a buyer of capacity. Much cleaner, less overhead, easy entry and exit from capacity.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: Maverick623
Posted 2013-01-27 18:49:13 and read 4182 times.

Quoting LAXintl (Reply 37):

Having a company inhouse brings all types of added inefficiency - from billions in ownership of planes, employees with union issues, wage creep etc.

Nothing wrong with being a buyer of capacity. Much cleaner, less overhead, easy entry and exit from capacity.

In other words, all it does is pass the issues onto someone else, creating a whole new set of issues in the process.

It is precisely that business mindset (attempting to reap the benefits without doing any of the sowing, as it were) that has the industry in the mess it's in.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: lightsaber
Posted 2013-01-27 20:20:50 and read 4070 times.

Quoting LAXintl (Reply 28):
However being in BK AMR clearly does not want the books to be saddled with additional long term debt.

That is at the heart of it. If AMR exits BK with too much debt, there will be negative talk and inhibitions to floating the new stock. I'm sorry for AE crew, but that is a stark reality of going into BK.

Quoting norcal (Reply 31):
10. Notwithstanding the Agreement, American Eagle Airlines, Inc.
(“American Eagle”) will continue to provide the majority of regional feed services to American.

Majority = 51%. Now is that majority of flights or seats? The reality is that quite a bit will go to other vendors.

Lightsaber

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: LAXintl
Posted 2013-02-07 17:55:49 and read 3490 times.

AE ALPA filed objections in BK court to the AA-Republic deal saying it undermine the value of American Eagle and goes against the just recently court approved pilot labor agreement meant to help AE exit BK strong itself.

Basically they say the RAH agreement which was negotiated with minimal disclosure or economic consideration, harms the future prospects of AE, employees, creditors and other interested parties.

http://finance.yahoo.com/news/eagle-...ile-court-objection-010000177.html

=

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: ckfred
Posted 2013-02-07 20:55:20 and read 3331 times.

Is all of this really that new? When AA decided to close the STL hub, American Connection (Chatauqua) flying was shifted to ORD. Eagle pilots at the ORD crew base were really upset that some Eagle routes out of ORD were being shifted to Connection.

A friend of mine, who is a 738 captain, said more than once to an Eagle pilot, "Now you know how we mainline pilots felt, when routes were shifted to Eagle."

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: commavia
Posted 2013-02-07 21:06:26 and read 3311 times.

Quoting LAXintl (Reply 40):
AE ALPA filed objections in BK court to the AA-Republic deal saying it undermine the value of American Eagle and goes against the just recently court approved pilot labor agreement meant to help AE exit BK strong itself.

Basically they say the RAH agreement which was negotiated with minimal disclosure or economic consideration, harms the future prospects of AE, employees, creditors and other interested parties.

Seems ridiculously frivolous, and without any legal basis. Eagle employees are essentially trying to block the deal in court because they say it hurts their careers? If that were somehow the basis for lawsuits, America's courtrooms would literally have been filled day and night for the last decade with airline employees airing their various grievances.

Perhaps it's just because I'm unfamiliar, but I'm not really clear on why Eagle's unions feel AMR had any regulatory or legal requirement to disclose the (no doubt highly proprietary) "economic considerations that led to this contract," at least to any party other than the creditors committee. And if Eagle's unions readily acknowledge and accept that this agreement with Republic is entirely permissible under the new Eagle union contracts, then I struggle to see how they plan to support a motion for the court to stop this action. In other words: on what legal basis would a judge injunct AMR from executing this contract?

I feel for Eagle's employees, I really do - but Eagle's unions trying to throw up road blocks to stand in the way of AMR becoming competitive is going to do absolutely nothing to help their cause.

Quoting ckfred (Reply 41):
When AA decided to close the STL hub, American Connection (Chatauqua) flying was shifted to ORD. Eagle pilots at the ORD crew base were really upset that some Eagle routes out of ORD were being shifted to Connection.

That was very different, though, for one key reason. The company back then may well have been violating the union contract by moving non-owned Eagle capacity to ORD. Today, however, that isn't the case. AMR's union contracts - both with mainline and Eagle - are absolutely clear and unambiguous: this deal with Republic is entirely allowed. There is absolutely no question or debate of that.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: LAXintl
Posted 2013-02-08 06:34:18 and read 3097 times.

Quoting commavia (Reply 42):
Seems ridiculously frivolous, and without any legal basis.

Its an interesting argument, which I actually do think has some merit.

What ALPA is saying is, AA going off making a deal with RAH very much hurts AE as an enterprise, which in turn is something that should concern the court greatly.
After all one of the basic goals of BK and one of the courts duties is to look after the welfare and best interest of the bankrupt party, and this indeed could tarnish the strength on long term prospects of AE.

We might very well have a case that AA and AE have divergent interest in their bankruptcies, however it could very well be that AA actions will create harm to AE party jeopardizing its future prospects which indeed should concern the court.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: jfklganyc
Posted 2013-02-08 07:02:10 and read 3069 times.

There is no case. This is Tony's version of pissing into the wind.

Here's the reality for Eagle guys: you are at a regional that got pulled into BK by the big guy you were attached to.

The big guy is sitting at the table trying to renegotiate every contract he has. And here comes another big guy to the table (US) that will make yet another deal with your big guy that has nothing to do with you.

Sadly for Eagle pilots, you are not even at the table. Although, ALPA would like you to believe that you are.

When this all shakes out, Eagle Airlines will be left flying 145s and CRJ 700s to ORD, DFW, MIA, and JFK.

Since they can not fill classes, even with a signing bonus, the shrinkage will occur naturally.

Long story short, if you are an Eagle pilot...leave if you can. US is hiring B6 is hiring UA is hiring DL will be hiring

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: rfields5421
Posted 2013-02-08 07:23:29 and read 3026 times.

Quoting jfklganyc (Reply 44):
Here's the reality for Eagle guys: you are at a regional that got pulled into BK by the big guy you were attached to.

The big guy is sitting at the table trying to renegotiate every contract he has.

That is factually incorrect. AMR Corporation is in bankruptcy.

American Airlines is one subsidiary of AMR, and American Eagle Holdings is another subsidiary of AMR. They have equal standing - and NEITHER one has a seat at the table.

The bankruptcy court has to balance the needs of the creditors against the various subsidaries and how they can come out of the BK with the most value for the creditors, yet create a viable company in the end.

The AMR management cannot give value (contracts for services) of one subsidary away to lessen the costs of another subsidiary without proving to the court that the end result is a greater value for the top level holding company.

This isn't only about making AA stronger.

If AA was not in bankruptcy, then AMR could treat AE as a disposable asset.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: commavia
Posted 2013-02-08 07:26:37 and read 3026 times.

Quoting LAXintl (Reply 43):
What ALPA is saying is, AA going off making a deal with RAH very much hurts AE as an enterprise, which in turn is something that should concern the court greatly.
After all one of the basic goals of BK and one of the courts duties is to look after the welfare and best interest of the bankrupt party, and this indeed could tarnish the strength on long term prospects of AE.

We might very well have a case that AA and AE have divergent interest in their bankruptcies, however it could very well be that AA actions will create harm to AE party jeopardizing its future prospects which indeed should concern the court.

Huh? The bankruptcy is about maximizing the return for stakeholders in AMR in general, not AA or Eagle specifically. Correct? AMR is acting in the greatest interests of the overall group. If that harms one particular subsidiary, that's just a fallout. At least that's how it's been in every other airline bankruptcy.

I still cannot figure out on what legal basis the unions are seeking injunctive relief. I cannot imagine that simply saying decisions made in bankruptcy have hurt them is enough. If that was a case, bankruptcy cases would never end. This deal was legal and wholly permissible under collective bargaining agreements, and the creditors committee hasn't complained about it. So why stop it?

As I said - it's sad what is going on at Eagle. But it's also sad that these unions honestly thinking throwing up temporary roadblocks - and I think we all know they will only be temporary - isn't going to help their cause one bit in the long-run.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: LAXintl
Posted 2013-02-08 07:56:09 and read 2971 times.

Quoting commavia (Reply 46):
Huh? The bankruptcy is about maximizing the return for stakeholders in AMR in general, not AA or Eagle specifically. Correct?

As we know each subsidiary is an independent business entity and has its own unique BK issues.

If you actually look at the docket - AA BK matters and AE matters are separate subcases and under BK law each party is supposed to be treated equitably. The law theory is that simply consolidating everything under one roof allows room for companies to to use fraud (in worst case), or in more benign cases simply whip saw, or make use of alter ego entities to cover each others failures at the expense of the other, which can harm everyone from the enterprise to its creditors.

So yes both AE and AA enterprises are certainly entangled under the AMR umbrella, however AE has as much rights to be properly reorganized under BK law as AA does. AE has its own books, records, financial affairs separate from its other parent subsidiaries.

So I think ALPA brings up a good point, that the actions of AA can certainly do major harm onto the business prospects of AE and the court should be aware of such.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: antoniemey
Posted 2013-02-08 20:35:19 and read 2706 times.

Quoting LAXintl (Reply 47):
AE has its own books, records, financial affairs separate from its other parent subsidiaries.

All of which will presumably show that AE does not have the personnel, aircraft, or available financing to take on a deal like the one AA brokered with Republic. (Not that Republic has the personnel, either, but they're not operating in bankruptcy court.)

I don't really think that the court will agree that a deal which does not remove existing flying or preclude Eagle from gaining future flying contracts harms Eagle in any significant way. But, I could be wrong. I'm not, after all, a lawyer.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: LAXintl
Posted 2013-02-09 09:30:32 and read 2548 times.

Both AFA and TWU have joined ALPA going against the Republic deal.

In their objections they question the need for the 15-year agreement and also state that AA decision making has dominated the AMR BK case with AE not having separate representation in the proceeding. AA's decision to increases flying elsewhere would impact the prospects of AE going forward.

Also unions contend the CBA amendments that agreed to only weeks prior were made based on expected flying opportunities and profit sharing representations that AMR made which now have significantly changes. Clearly AMR knew about the Republic deal while it was trying to achieve the voluntary employee concessions.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: GentFromAlaska
Posted 2013-02-10 08:01:06 and read 2253 times.

As it relates to the subject matter; can we use MQ IATA designator to identify American Eagle in lieu of AE please.

Just as some might affiliate AE with American Eagle some might also confuse it to be Arab Emirates. The AE IATA designator is assigned to Mandarin Airlines of Taiwan. Thanks in Advance.

Kudo's to those who took the time to to identify and use the correct code.

Topic: RE: American Eagle Union Blasts AMR Over Republic
Username: B727FA
Posted 2013-02-19 08:22:03 and read 1811 times.

Quoting LAXintl (Reply 49):
Also unions contend the CBA amendments that agreed to only weeks prior were made based on expected flying opportunities and profit sharing representations that AMR made which now have significantly changes.

TWA/APFA anyone?


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