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AA Close To Deal On Eagle  
User currently offlineLAXintl From United States of America, joined May 2000, 26175 posts, RR: 50
Posted (3 years 6 months 3 weeks 4 days 11 hours ago) and read 13767 times:

Not much details, but looks like time to sink or swim for Eagle is drawing close.
Sounds like a straight capacity purchase agreement with AA in works.

Announcement could come as soon as next week according to ALPA.

Quote:
American Nears Accord on Eagle Flying Contract, Pilots Say

American Airlines parent AMR Corp. (AMR) is close to an agreement on regional flying that would be provided by American Eagle as a stand-alone carrier, Eagle’s pilot union said.

“It is our understanding that management is nearing completion in their negotiations over a potential air-services agreement between Eagle and AMR, and we expect to be briefed on AMR’s version of this document next week,” the notice said.

Story
http://www.bloomberg.com/news/2011-0...le-flying-contract-pilots-say.html


I still question the entire viability of the idea of making Eagle standalone under the AMR umbrella.
There still needs to be massive changes to avoid continued flow of red ink for the parent otherwise.


From the desert to the sea, to all of Southern California
22 replies: All unread, jump to last
 
User currently offlineflyinryan99 From United States of America, joined Feb 2001, 2033 posts, RR: 13
Reply 1, posted (3 years 6 months 3 weeks 4 days 11 hours ago) and read 13685 times:

Quoting LAXintl (Thread starter):
I still question the entire viability of the idea of making Eagle standalone under the AMR umbrella.
There still needs to be massive changes to avoid continued flow of red ink for the parent otherwise.

Maybe they are thinking Eagle can bid on other airline's flying too to bring in additional revenue?

Quote:
The Air Line Pilots Association at Eagle also said it’s told AMR about concerns that the smaller airline won’t be able to employ enough pilots for the proposed business plan, according to a member update posted on the union’s website.

Are they going to be buying some new aircraft to fly? I think all pilots for AA have recalled and Eagle is hiring off the streets, correct? The only thing I can think of is there is a pending aircraft purchase coming up in which they would need more pilots to cover more flying. Any other thoughts?


User currently offlinecommavia From United States of America, joined Apr 2005, 11983 posts, RR: 62
Reply 2, posted (3 years 6 months 3 weeks 4 days 11 hours ago) and read 13510 times:

Quoting LAXintl (Thread starter):
I still question the entire viability of the idea of making Eagle standalone under the AMR umbrella.

I think Mike Boyd summed it up last week:

This also illuminates the intellectual "crazy aunt" in the attic that nobody wants to talk about: there are no real alternatives for Eagle outside of the AA system. This doesn't mean that AMR won't be able to (somehow) spin Eagle off and out from under the AMR banner. Regardless, the implications that as an independent entity it will be able to bid on flying for other majors are simply not consistent with reality. Ask ExpressJet how well that's working for them, long term.


User currently offlineLAXintl From United States of America, joined May 2000, 26175 posts, RR: 50
Reply 3, posted (3 years 6 months 3 weeks 4 days 10 hours ago) and read 13257 times:

Quoting flyinryan99 (Reply 1):
Maybe they are thinking Eagle can bid on other airline's flying too to bring in additional revenue?

If allowed I'm sure they would try, however considering that according to AA, Eagle has the highest cost in the industry they are not going to be winning any contracts.

Quoting flyinryan99 (Reply 1):
Any other thoughts?

Big cuts in labor cost? Some form of Ch11 to dump/gut contract?

At the end of the day unless AMR want to continue funding losses, Eagle to survive on its own has to be restructured and get its cost inline with regional peers.



From the desert to the sea, to all of Southern California
User currently offlineaacun From Mexico, joined Jan 2004, 570 posts, RR: 1
Reply 4, posted (3 years 6 months 3 weeks 4 days 10 hours ago) and read 13201 times:
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There is a joint conference call scheduled for tommorrow between AA and all of the pilot bases along with APA. So lets see what they have to say tommorrow.

User currently onlineLAXtoATL From United States of America, joined Oct 2009, 1659 posts, RR: 2
Reply 5, posted (3 years 6 months 3 weeks 4 days 10 hours ago) and read 13184 times:

Quoting LAXintl (Thread starter):


Not much details, but looks like time to sink or swim for Eagle is drawing close.
Sounds like a straight capacity purchase agreement with AA in works.

The devil will be in the details. Mainly how long the agreement is for. I'm not sure Eagle can swim without AA, but if the agreement is for a lengthy enough period it can buy them enough time gradually restructure (i.e. sell assets to the highest bidder)

Quoting commavia (Reply 2):

I think Mike Boyd summed it up last week:

This also illuminates the intellectual "crazy aunt" in the attic that nobody wants to talk about: there are no real alternatives for Eagle outside of the AA system. This doesn't mean that AMR won't be able to (somehow) spin Eagle off and out from under the AMR banner. Regardless, the implications that as an independent entity it will be able to bid on flying for other majors are simply not consistent with reality. Ask ExpressJet how well that's working for them, long term.

Sounds about right to me.


User currently offlinecvg2lga From United States of America, joined Feb 2005, 635 posts, RR: 0
Reply 6, posted (3 years 6 months 3 weeks 4 days 5 hours ago) and read 11999 times:

I hope for the sake of the employees, AE can pull something out of a hat & get themselves in better shape. Sounds like it might mean some major cuts though. Hopefully, even if that being through pay cuts, no jobs or stations will be lost.

My two cents.

Tchau

DA-



They don't call em' emergencies anymore. They call em' Patronies.
User currently offlineRising From United States of America, joined May 2010, 278 posts, RR: 1
Reply 7, posted (3 years 6 months 3 weeks 4 days 4 hours ago) and read 11389 times:

Quoting LAXintl (Thread starter):
I still question the entire viability of the idea of making Eagle standalone under the AMR umbrella.

I agree and unless I am missing something, Eagle is "standalone" under AMR already. American Eagle Airlines, Inc. and Executive Airlines, Inc., have separate management and are separate legal entities. They have separate internal P&Ls and management. Thus, having them both bid on flying from American Airlines, Inc. is just robbing Peter to pay Paul and would really just be an accounting tactic.

How I understood the article, is that AMR is close to jettisoning both Eagle brand subsidiaries out from under AMR as a true standalone carrier. The only way to do that, if there is no buyer, is in an IPO. Good luck with that, Gerard.



If it doesn't make sense, it's because it's not true.
User currently offlinecommavia From United States of America, joined Apr 2005, 11983 posts, RR: 62
Reply 8, posted (3 years 6 months 3 weeks 4 days 4 hours ago) and read 11074 times:

Quoting Rising (Reply 7):
I agree and unless I am missing something, Eagle is "standalone" under AMR already. American Eagle Airlines, Inc. and Executive Airlines, Inc., have separate management and are separate legal entities. They have separate internal P&Ls and management.

Correct. AMR Eagle, Inc. is a wholly owned subsidiary of AMR Corporation (as is American Airlines, Inc.) - and AMR Eagle itself has several subsidiaries, including American Eagle Airlines, Inc. (MQ) and Executive Airlines, Inc. (OW). AMR Eagle has its own management structure and P&Ls, and has an industry-standard, fee-per-departure capacity purchase agreement with its only customer, American Airlines.

Quoting Rising (Reply 7):
Thus, having them both bid on flying from American Airlines, Inc. is just robbing Peter to pay Paul and would really just be an accounting tactic.

It's not really an accounting tactic - again, it is merely the industry standard fee-per-departure capacity purchase system that exists at virtually every other major U.S. airline with regional capacity. The only difference here is that AMR owns both sides of the transaction (for now). This system was put in place a few years ago so that AMR Eagle would begin reporting financials more comparably to its regional competitors, using a similar (again, industry standard) accounting methodology.

Quoting Rising (Reply 7):
How I understood the article, is that AMR is close to jettisoning both Eagle brand subsidiaries out from under AMR as a true standalone carrier. The only way to do that, if there is no buyer, is in an IPO. Good luck with that, Gerard.

First, I don't think AMR will be "jettisoning" the Eagle brand - but merely the company itself. I imagine it will be very similar to when Continental spun off what became ExpressJet: Continental retained ownership and control of the "Continental Express" brand and simply farmed out that brand to any operator it wanted, and ExpressJet post-spinoff had its own company name (ExpressJet, obviously) that was separate and independent of Continental.

Beyond that, to your larger point, I see absolutely no way AMR will be able to find a buyer for Eagle. Frankly, if AMR could even find someone to take Eagle for free and just agree to assume its debt, that would probably be a great deal for AMR. That, too, sadly, is unlikely. The only hope AMR has for "separation" is to spin the company off to shareholders.


User currently offlineRising From United States of America, joined May 2010, 278 posts, RR: 1
Reply 9, posted (3 years 6 months 3 weeks 4 days 4 hours ago) and read 10576 times:

Quoting commavia (Reply 8):

Good point. Thanks for the color.



If it doesn't make sense, it's because it's not true.
User currently offlineflyingbronco05 From United States of America, joined May 2002, 3840 posts, RR: 2
Reply 10, posted (3 years 6 months 3 weeks 4 days 1 hour ago) and read 9259 times:

And yet NOTHING has been said to the Eagle pilots within the past week about this.

I doubt anything big is going to happen anytime soon, mainly cause nobody wants Eagle. I do believe that AA will continue to take more AE Captains which in turn, will lower costs.



Never Trust Your Fuel Gauge
User currently offlinecommavia From United States of America, joined Apr 2005, 11983 posts, RR: 62
Reply 11, posted (3 years 6 months 3 weeks 3 days 19 hours ago) and read 7596 times:

Quoting flyingbronco05 (Reply 10):
And yet NOTHING has been said to the Eagle pilots within the past week about this.

It probably wouldn't. AMR is not only not under any responsibility to tell the Eagle pilots anything before they announce it publicly, but I would guess that AMR may not even want to.

Quoting flyingbronco05 (Reply 10):
I doubt anything big is going to happen anytime soon, mainly cause nobody wants Eagle.

Again - AMR does have options, albeit imperfect ones, even if they can't find a buyer.


User currently offlineAirNZ From , joined Dec 1969, posts, RR:
Reply 12, posted (3 years 6 months 3 weeks 3 days 18 hours ago) and read 7532 times:

Quoting flyinryan99 (Reply 1):
Are they going to be buying some new aircraft to fly? I think all pilots for AA have recalled and Eagle is hiring off the streets, correct? The only thing I can think of is there is a pending aircraft purchase coming up in which they would need more pilots to cover more flying. Any other thoughts?

Is that not something of a contradiction though? If they have opened said they may not be able to employ enough pilots (Heaven knows why not though!!) it wouldn't seem prudent to purchase more aircraft.

Quoting commavia (Reply 11):
AMR is not only not under any responsibility to tell the Eagle pilots anything before they announce it publicly,

You don't think they have a moral responsibility to do so?


User currently offlineflyinryan99 From United States of America, joined Feb 2001, 2033 posts, RR: 13
Reply 13, posted (3 years 6 months 3 weeks 3 days 16 hours ago) and read 6634 times:

Quoting AirNZ (Reply 12):
Is that not something of a contradiction though? If they have opened said they may not be able to employ enough pilots (Heaven knows why not though!!) it wouldn't seem prudent to purchase more aircraft.

Well...I guess the question we should be asking right now, are there enough pilots to currently staff Eagle's operation? If there are, then what are their plans moving forward that would cause a shortfall in pilots down the road? This is purely speculative but maybe AA is purchasing smaller aircraft like C-series or E190s and Eagle expects their pilots to be hired to fly those airplanes causing a shortfall at Eagle. I'm not sure why that statement is made, just wondering what others were thinking...


User currently offlinecommavia From United States of America, joined Apr 2005, 11983 posts, RR: 62
Reply 14, posted (3 years 6 months 3 weeks 3 days 16 hours ago) and read 6392 times:

Quoting AirNZ (Reply 12):
You don't think they have a moral responsibility to do so?

No.

Quoting flyinryan99 (Reply 13):
This is purely speculative but maybe AA is purchasing smaller aircraft like C-series or E190s and Eagle expects their pilots to be hired to fly those airplanes causing a shortfall at Eagle.

I don't think Eagle's pilots are deluded enough to expect that at all - maybe hopeful, but not with any expectations.

Jets the size of an ESeries or CSeries can't come onto AMR property without some sort of viable buy-in being worked out with mainline pilots (APA, not ALPA like Eagle's pilots), and realistically, I don't see the APA pilots agreeing to any sort of a 90-100-seater deal that doesn't involve them flying the planes.


User currently offlineflyinryan99 From United States of America, joined Feb 2001, 2033 posts, RR: 13
Reply 15, posted (3 years 6 months 3 weeks 3 days 16 hours ago) and read 6310 times:

Quoting commavia (Reply 14):
Jets the size of an ESeries or CSeries can't come onto AMR property without some sort of viable buy-in being worked out with mainline pilots (APA, not ALPA like Eagle's pilots), and realistically, I don't see the APA pilots agreeing to any sort of a 90-100-seater deal that doesn't involve them flying the planes.

Oh I understand that, what I'm saying is APA/AA pilots flying those planes and hiring the Eagle pilots leaving the lack of pilots at Eagle.


User currently offlinegoblin211 From United States of America, joined Jun 2010, 1209 posts, RR: 0
Reply 16, posted (3 years 6 months 3 weeks 3 days 12 hours ago) and read 4400 times:

Quoting LAXintl (Reply 3):
Eagle has the highest cost in the industry they are not going to be winning any contracts.

I agree. If I was an airline CEO I wouldn't take any chances with them, they're what might be called a "risky business"

Quoting LAXintl (Reply 3):
Big cuts in labor cost? Some form of Ch11 to dump/gut contract?

Why didn't AA just dump Eagle years ago when AA filed Ch. 11. Then maybe today, Eagle could stand on their own two feet as a very profitable LCC.



From the airport with love
User currently offlineJaws707 From United States of America, joined Aug 2001, 708 posts, RR: 1
Reply 17, posted (3 years 6 months 3 weeks 3 days 12 hours ago) and read 4350 times:

Quoting goblin211 (Reply 16):
Why didn't AA just dump Eagle years ago when AA filed Ch. 11. Then maybe today, Eagle could stand on their own two feet as a very profitable LCC.

AA didn't declare bankruptcy.


User currently offlineTranspac787 From United States of America, joined Jul 2007, 3217 posts, RR: 16
Reply 18, posted (3 years 6 months 3 weeks 3 days 11 hours ago) and read 3697 times:

Quoting goblin211 (Reply 16):
Why didn't AA just dump Eagle years ago when AA filed Ch. 11.

Care to favor us with the tale of AA declaring Chap 11 "years ago"...??

Quoting goblin211 (Reply 16):
If I was an airline CEO

It's surely a good thing you aren't. Between asserting that AA has declared bankruptcy and in another thread suggesting the 763 has both a greater payload and a greater range than the 744, you have quite a ways to go.  


User currently offlineCRJ900 From Norway, joined Jun 2004, 2234 posts, RR: 1
Reply 19, posted (3 years 6 months 3 weeks 3 days 10 hours ago) and read 3428 times:
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Quoting commavia (Reply 14):
Jets the size of an ESeries or CSeries can't come onto AMR property without some sort of viable buy-in being worked out with mainline pilots (APA, not ALPA like Eagle's pilots), and realistically, I don't see the APA pilots agreeing to any sort of a 90-100-seater deal that doesn't involve them flying the planes.

Is it more realistic that AMR wants to standardise on CRJ700s instead, replacing all 40-50-seat ERJs with CR7s and let ERJ pilots fly them? Would AA pilots allow that?



Come, fly the prevailing winds with me
User currently offlineflyby519 From United States of America, joined Jul 2007, 1235 posts, RR: 0
Reply 20, posted (3 years 6 months 3 weeks 3 days 10 hours ago) and read 3329 times:

Quoting CRJ900 (Reply 19):
Is it more realistic that AMR wants to standardise on CRJ700s instead, replacing all 40-50-seat ERJs with CR7s and let ERJ pilots fly them? Would AA pilots allow that?

Eagle definitely wants/needs to get rid of the 37, 44 and some of the 50seat jets. Im sure they would love to replace them with 70seaters. APA stands a tough ground right now saying they want to take back all 70seaters and fly them at mainline, but the sad reality that AAint happenin. I'm guessing when it is all said and done, APA allows more 70seaters at some sort of ratio to 100seaters at mainline (for every two 100seaters at AA, one 70seater at Eagle).



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User currently offlineckfred From United States of America, joined Apr 2001, 5312 posts, RR: 1
Reply 21, posted (3 years 6 months 3 weeks 3 days 9 hours ago) and read 3185 times:

Quoting aacun (Reply 4):
There is a joint conference call scheduled for tommorrow between AA and all of the pilot bases along with APA. So lets see what they have to say tommorrow.

The base meetings were all scheduled for Wednesday morning. It's not coming up on 4:00 pm CDT. So, what does anyone know?

Quoting flyby519 (Reply 20):
Eagle definitely wants/needs to get rid of the 37, 44 and some of the 50seat jets. Im sure they would love to replace them with 70seaters. APA stands a tough ground right now saying they want to take back all 70seaters and fly them at mainline, but the sad reality that AAint happenin. I'm guessing when it is all said and done, APA allows more 70seaters at some sort of ratio to 100seaters at mainline (for every two 100seaters at AA, one 70seater at Eagle).

In talking to some AA pilots, the focus seems to be on mainline pilots flying the jets that will fill the gap between the CRJ700 and the MD-80, whether they are C-Series from Canadair or the larger Embrears (170/175/190/195). Getting the CRJ700s moved over to mainline doesn't seem to be on the APA radar.

Again, this is just conversations with a few pilots.


User currently offlinecommavia From United States of America, joined Apr 2005, 11983 posts, RR: 62
Reply 22, posted (3 years 6 months 3 weeks 3 days 7 hours ago) and read 3004 times:

Quoting ckfred (Reply 21):
In talking to some AA pilots, the focus seems to be on mainline pilots flying the jets that will fill the gap between the CRJ700 and the MD-80, whether they are C-Series from Canadair or the larger Embrears (170/175/190/195). Getting the CRJ700s moved over to mainline doesn't seem to be on the APA radar.

APA still refuses to accept reality.

Their latest APA/LinkClick.aspx?fileticket=xVXIcD-2f_Q%3d&tabid=806" target="_blank">negotiations communication sums up their head-in-the-sand mentality quite clearly:

"This contract is going to require a significant amount of vision about the future of our industry. It will require us to learn from the past, but also look to the future. Since we signed the onerous agreement that we are currently working under, the competitive landscape has changed significantly ─ so our focus must likewise change. In addition, airline executives have devised many new and complex ways to outsource our flying ─ and as such, our Section 1 must similarly evolve to combat those threats, both domestically and internationally."

On the domestic front, Eagle and the other “regional” carriers have experienced double-digit annual growth for the past decade. Meanwhile, APA pilots have seen their domestic block hours cut so deeply that in 2010 we flew nearly 843,000 fewer domestic block hours annually than we did in 2002. We need to put an end to this outsourcing of our flying, and establish appropriate protections against a further decrease in both the number of pilots at American Airlines and the amount of flying that we perform.

To accomplish this, we must remain focused on retaining the limitations on the number of seats in the aircraft that our regional carriers can operate. It is not difficult to see the myriad areas where our contract was weakened in 2003, but one aspect that was significantly strengthened was the restriction on the size of aircraft that Eagle and the other regionals could operate (up to 50 seats). We will resist any pressure to increase the size or number of aircraft above this restriction beyond the existing exemption of the 47 CRJ-700s.We will work on a solution to return this flying to pilots on the AA list.

An even greater uncertainty to our domestic flying looms in our contract in the form of Section 1.H., Domestic Carriers Other Than Commuter Carriers.


The union is still viewing regional feed as a threat, rather than an opportunity, and continues to ignore how AA's scope protection stacks up against the competition - where more of the flying has been outsourced to regional operators (flying more large RJs) than what has occurred at AA. The APA analysis of the situation also misses the 800-lb gorilla in the room, which is, of course, why it is that mainline carriers (including AA) have shifted so much flying to regionals: because regional pilots are so much cheaper! As long as regional pilots are willing to work for so much less than mainline, this scenario isn't going to change.

The APA acts as though the company is moving this flying to Eagle just because they enjoy it. In reality, putting all the conspiracy theories aside, it comes down to cost - pure and simple! Eagle's pilots get paid way less, so it stands to reason that as the industry's market pilot pay scale decreases, and AA is increasingly up against more and more flying from competitors with lower pilot costs, AA is going to have to shift to its lowest-possible pilot cost carrier in order to be competitive.

Thus, perhaps it's time for the union to show some "vision" and "look to the future" rather than viewing everything as a win-lose, zero-sum game. This is an immense opportunity for the APA to not only protect the profession (as they love to say) by setting a monumental precedent for mainline pilots industry-wide, but also dramatically expand their ranks and flying. If the pilots were willing to work with the company on rates for small jets that were competitive with the non-union, low-fare, and/or regional operators flying those planes elsewhere, APA could bring that flying to mainline, keep their company competitive and growing, and add to their dues-paying membership.

The APA is still thinking last century - they view this flying as small jet and codeshare flying that is being "taken" from them. In reality, this is flying that wasn't theirs to begin with and won't be theirs in the future unless they are cost-competitive with the airlines flying in these markets today. APA views this flying as "owed" them, while totally ignoring the market reality of which other carriers AA would be up against if it flew this flying today, at today's mainline rates. APA's pay scales would need to be competitive with the pay scales of pilots flying 90-seaters at JetBlue, USAirways Express, Delta Connection, or doing that Alaska/Horizon codeshare flying up and down the west coast.


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