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AMR Details Eagle Spin-Off  
User currently offlinecommavia From United States of America, joined Apr 2005, 11983 posts, RR: 62
Posted (3 years 4 months 2 weeks 5 days 13 hours ago) and read 14824 times:

SEC Form 10 filing to be submitted today. Details include:

* Eagle generated $1.2B in 2010 revenue, including $250M from ground handling
* Eagle would operate 281 aircraft for AMR under a 9-year capacity purchase agreement
* AMR would competitively re-bid up to 12 prop aircraft beginning in 2012, and up to 40 jets beginning in 2014
* Agreement provides for rate re-set after four years to account for any market changes
* Under an additional 8-year agreement, Eagle would provide ground handling for AMR at 106 airports
* AMR would have the right to competitively re-bid a specified number of ground handled stations each year
* All of Eagle's jets (and the associated debt) would pass to AMR ownership before the spin-off
* Spin-off does not require AMR shareholder approval

111 replies: All unread, showing first 25:
 
User currently offlinejamake1 From United States of America, joined May 2004, 1023 posts, RR: 2
Reply 1, posted (3 years 4 months 2 weeks 5 days 13 hours ago) and read 14797 times:

I wonder how AA Eagle employees feel about this...


United's B747-400. "She's a a cruel lover."
User currently offlinecommavia From United States of America, joined Apr 2005, 11983 posts, RR: 62
Reply 2, posted (3 years 4 months 2 weeks 5 days 13 hours ago) and read 14756 times:

Quoting jamake1 (Reply 1):
I wonder how AA Eagle employees feel about this...

It's hardly a surprise to anyone - everyone I know at AA and Eagle has been fully aware of this and seen it coming for months. In internal employee communications, AA/Eagle have been referring to the separation of Eagle from AMR alternatively as "if" and "when" for months. I don't think many people - either within or outside Eagle - are all that optimistic that the company will be able to survive long-term as an independent entity. I think best-case scenario for Eagle would be to follow the path of ExpressJet - and get bought up by a larger grouping within a few years.


User currently offlineGoldenshield From United States of America, joined Jan 2001, 6120 posts, RR: 14
Reply 3, posted (3 years 4 months 2 weeks 5 days 13 hours ago) and read 14652 times:

Quoting commavia (Thread starter):
All of Eagle's jets (and the associated debt) would pass to AMR ownership before the spin-off

Looks to me like Eagle might be worse off than Expressjet here. No planes of their own means that AMR can play they like a fiddle.



Two all beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun.
User currently offlinecommavia From United States of America, joined Apr 2005, 11983 posts, RR: 62
Reply 4, posted (3 years 4 months 2 weeks 5 days 12 hours ago) and read 14643 times:

For those interested in some "light" reading, the full Form 10 SEC registration is available here.

Some very interesting reading in there about all the details of Eagle's business, the spin-off, and Eagle's relationship with AA/AMR both today and after the separation.

Just a few things I've seen scanning through:

* Looks like Eagle intends to make their ground-handling business a big component of their business model post-spin-off
* AMR will, indeed, retain ownership over the "American Eagle" brand and will grant the spun off company the right to use them as long as the air service agreement is in place (I remember some lively A.net discussion on this months ago)
* Eagle will continue to operate substantially all of its maintenance facilities (some of which are bigger than I thought), and also lease hangar space in places like LGA, etc. from AA, and continue to lease headquarters space (CP5/4th floor, I assume) from AMR
* AA apparently can immediately terminate it's ground handling contracts with Eagle at 2 hub and 10 non-hub airports

[Edited 2011-08-11 05:58:20]

User currently offlinenorcal From United States of America, joined Mar 2005, 2459 posts, RR: 5
Reply 5, posted (3 years 4 months 2 weeks 5 days 12 hours ago) and read 14571 times:

There really aren't that many options out there for AMR to diversify its Eagle feed. APA scope prohibits any carrier (except Eagle) for operating 70 seaters for American or for another carrier. I have no idea how they plan on diversifying the ATR flying unless they are bringing in someone to do ATR-42s. Only Eagle can fly ATR-72s under current APA scope.

That scope situation started the whole RAH thing because Republic was forced to pay millions of dollars to APA when they put E-170s on the Chautauqua certificate. Even though those were flying for United it was still a violation of American's scope. RAH had to create Shuttle America in order to get around that issue, and this is currently the reason why Chautauqua is all 50 seat aircraft.

That pretty much leaves AMR with the following carriers to choose from:
1. Chautauqua
2. TSA
3. Commutair
4. Air Wisconsin
5. Great Lakes
6. Gulf Stream International

Every other carrier already has 70 seaters or will soon have them on their certificates (ASA/XJT are merging). Out of that group only 2 currently operate ERJs. Of course someone could start a new certificate and put ERJs on it but that's expensive. Furthermore Eagle's "high costs" have nothing to do with its contract and everything to do with the age of its work force. That longevity issue is quickly disappearing as the senior guys continue to flow to American. 240 of the most senior are going soon followed by 824 as early as next year.

Who would fly these aircraft anyways? There is a huge shortage of pilots at regionals right now. Staffing is tight and flights are getting cancelled every day due to a lack of crews. Once Age 65 retirements start, FTDT rules go into effect, and the ATP regionals are going to really struggle to staff their fleets. Come 2014 it might be a tall order for another regional to bring on 40 jets and staff them.

Finally other regional carriers are getting much better contracts now. The contract that the Pinnacle/Mesaba/Colgan guys signed is far better than Eagle. Point is, once Eagle gets junior I doubt they'll have problems coming in cheaper than other regionals.

Of course APA could relax that provision of their scope, but why would they? What would AMR have to give up to make that a reality? Would it be worth it?


User currently offlineNewark727 From United States of America, joined Dec 2009, 1368 posts, RR: 0
Reply 6, posted (3 years 4 months 2 weeks 5 days 12 hours ago) and read 14554 times:

Quoting commavia (Thread starter):
* AMR would competitively re-bid up to 12 prop aircraft beginning in 2012, and up to 40 jets beginning in 2014

For the uninitiated, what exactly does this mean? That certain routes currently operated by Eagle would be up for bid to be operated by another regional carrier?


User currently offlineGoldenshield From United States of America, joined Jan 2001, 6120 posts, RR: 14
Reply 7, posted (3 years 4 months 2 weeks 5 days 12 hours ago) and read 14534 times:

Quoting norcal (Reply 5):
RAH had to create Shuttle America in order to get around that issue, and this is currently the reason why Chautauqua is all 50 seat aircraft.

Not to nit-pick, but Shuttle America was not "created" by RAH. It was a stand-alone airline that did okay for a few years, and was faltering when they were bought.



Two all beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun.
User currently offlinecommavia From United States of America, joined Apr 2005, 11983 posts, RR: 62
Reply 8, posted (3 years 4 months 2 weeks 5 days 12 hours ago) and read 14523 times:

Quoting Newark727 (Reply 6):
For the uninitiated, what exactly does this mean? That certain routes currently operated by Eagle would be up for bid to be operated by another regional carrier?

Essentially, at predetermined periods, AMR has off-ramps where they can open for competition the capacity currently provided to AMR by Eagle equivalent to X amount of Y aircraft. So, for example, beginning in 2012, AMR can apparently open-up for re-bid the equivalent of 12 ATR-72s worth of aircraft. That means that AMR can send out an RFP to any and all interested parties to bid on the flying of 12 70-seat turboprops. If, at that time, Eagle's bid is deemed the lowest and/or most competitive/attractive, AMR can keep that flying with Eagle, or, alternatively, they could, say, shift that flying to another operator.


User currently offlineNewark727 From United States of America, joined Dec 2009, 1368 posts, RR: 0
Reply 9, posted (3 years 4 months 2 weeks 5 days 12 hours ago) and read 14502 times:

Quoting commavia (Reply 8):

Essentially, at predetermined periods, AMR has off-ramps where they can open for competition the capacity currently provided to AMR by Eagle equivalent to X amount of Y aircraft. So, for example, beginning in 2012, AMR can apparently open-up for re-bid the equivalent of 12 ATR-72s worth of aircraft. That means that AMR can send out an RFP to any and all interested parties to bid on the flying of 12 70-seat turboprops. If, at that time, Eagle's bid is deemed the lowest and/or most competitive/attractive, AMR can keep that flying with Eagle, or, alternatively, they could, say, shift that flying to another operator.

I see, thank you.


User currently offlinenorcal From United States of America, joined Mar 2005, 2459 posts, RR: 5
Reply 10, posted (3 years 4 months 2 weeks 5 days 12 hours ago) and read 14454 times:

Quoting commavia (Reply 8):
So, for example, beginning in 2012, AMR can apparently open-up for re-bid the equivalent of 12 ATR-72s worth of aircraft. That means that AMR can send out an RFP to any and all interested parties to bid on the flying of 12 70-seat turboprops. If, at that time, Eagle's bid is deemed the lowest and/or most competitive/attractive, AMR can keep that flying with Eagle, or, alternatively, they could, say, shift that flying to another operator.

Actually they can't do this. Aircraft as large as ATR-72s can only be flown by American Eagle or Executive:


"Scope Exception: Commuter Air Carriers

1. Commuter Air Carriers and Section 1 Limitations.

The Company or an Affiliate may create, acquire, maintain an equity position in, enter into franchise type agreements with, and/or codeshare with a Commuter Air Carrier, and flying by any such Commuter Air Carrier shall not be subject to the limitations of Section 1.C. above, so long as any such Commuter Air Carrier operates in accordance with the limitations set forth in this Section 1.D.

2. American Eagle, Inc. and Executive Airlines, Inc.

American Eagle, Inc. and Executive Airlines, Inc. may operate, in the aggregate, no more than 43 ATR 72 aircraft or other turbo prop aircraft certificated in the United States and Europe for a maximum passenger capacity of between 51 and 70 seats, without losing their status as Commuter Air Carriers."



Definition of Commuter Air Carrier:

4. Commuter Air Carrier

The term "Commuter Air Carrier" refers to any Air Carrier utilizing only (a) aircraft that are certificated in the United States and Europe with a maximum passenger capacity of 50 passenger seats or fewer and (b) aircraft that are not certificated in any country with a maximum gross takeoff weight of more than 64,500 pounds. If an aircraft type operated by an Air Carrier otherwise meeting the conditions in the preceding sentence is recertified with a maximum passenger capacity of greater than 50 passenger seats, the Air Carrier operating said aircraft shall remain a Commuter Air Carrier so long as it operates said aircraft with no more than 50 passenger seats.



Only Eagle and Executive are allowed to fly aircraft greater than 70 seats for American.


User currently offlinecommavia From United States of America, joined Apr 2005, 11983 posts, RR: 62
Reply 11, posted (3 years 4 months 2 weeks 5 days 12 hours ago) and read 14395 times:

Quoting norcal (Reply 10):
Only Eagle and Executive are allowed to fly aircraft greater than 70 seats for American.

Well than AMR obviously knows something you don't about how the negotiations with the APA are going.  


User currently offlinenorcal From United States of America, joined Mar 2005, 2459 posts, RR: 5
Reply 12, posted (3 years 4 months 2 weeks 5 days 12 hours ago) and read 14371 times:

Quoting commavia (Reply 11):
Well than AMR obviously knows something you don't about how the negotiations with the APA are going.

Could very well be, but I have to ask what AMR is going to give up to get APA to surrender that?

APA has pretty big leverage against AMR management with that clause. It limits current heavy weights like SkyWest Inc. and Pinnacle Inc. from entering the whipsaw game. Have to wonder what they are getting in return.


User currently offlinecommavia From United States of America, joined Apr 2005, 11983 posts, RR: 62
Reply 13, posted (3 years 4 months 2 weeks 5 days 12 hours ago) and read 14346 times:

Quoting norcal (Reply 12):
Could very well be, but I have to ask what AMR is going to give up to get APA to surrender that?

I continue to hold out (possibly unfounded) hope of a 'grand bargain' between AMR and the APA involving regional flying.

We'll see, I suppose.


User currently offlineckfred From United States of America, joined Apr 2001, 5312 posts, RR: 1
Reply 14, posted (3 years 4 months 2 weeks 5 days 12 hours ago) and read 14330 times:

Quoting norcal (Reply 5):
There really aren't that many options out there for AMR to diversify its Eagle feed. APA scope prohibits any carrier (except Eagle) for operating 70 seaters for American or for another carrier. I have no idea how they plan on diversifying the ATR flying unless they are bringing in someone to do ATR-42s. Only Eagle can fly ATR-72s under current APA scope.

That scope situation started the whole RAH thing because Republic was forced to pay millions of dollars to APA when they put E-170s on the Chautauqua certificate. Even though those were flying for United it was still a violation of American's scope. RAH had to create Shuttle America in order to get around that issue, and this is currently the reason why Chautauqua is all 50 seat aircraft.

That pretty much leaves AMR with the following carriers to choose from:
1. Chautauqua
2. TSA
3. Commutair
4. Air Wisconsin
5. Great Lakes
6. Gulf Stream International

Every other carrier already has 70 seaters or will soon have them on their certificates (ASA/XJT are merging). Out of that group only 2 currently operate ERJs. Of course someone could start a new certificate and put ERJs on it but that's expensive. Furthermore Eagle's "high costs" have nothing to do with its contract and everything to do with the age of its work force. That longevity issue is quickly disappearing as the senior guys continue to flow to American. 240 of the most senior are going soon followed by 824 as early as next year.

Who would fly these aircraft anyways? There is a huge shortage of pilots at regionals right now. Staffing is tight and flights are getting cancelled every day due to a lack of crews. Once Age 65 retirements start, FTDT rules go into effect, and the ATP regionals are going to really struggle to staff their fleets. Come 2014 it might be a tall order for another regional to bring on 40 jets and staff them.

Finally other regional carriers are getting much better contracts now. The contract that the Pinnacle/Mesaba/Colgan guys signed is far better than Eagle. Point is, once Eagle gets junior I doubt they'll have problems coming in cheaper than other regionals.

Of course APA could relax that provision of their scope, but why would they? What would AMR have to give up to make that a reality? Would it be worth it?

What would AMR offer that could get APA to relas the Scope Clause? How about an order of 100-seat jets, to be flown by mainline? The smallest planes that Airbus and Boeing could potentially deliver to AA are around 125 to 130 seats.


User currently offlinerdh3e From United States of America, joined Mar 2011, 1828 posts, RR: 3
Reply 15, posted (3 years 4 months 2 weeks 5 days 11 hours ago) and read 14160 times:

Quoting norcal (Reply 12):
APA has pretty big leverage against AMR management with that clause. It limits current heavy weights like SkyWest Inc. and Pinnacle Inc. from entering the whipsaw game. Have to wonder what they are getting in return.

If the APA decides to continue their current tack of very restrictive scope and pay rules (lets not forget they won't even let AMR buy 787's), then that "leverage" is going to mean squat during a bankruptcy or to the guy in the welfare line handing out their checks.


User currently offlineERJ170 From United States of America, joined Apr 2004, 6791 posts, RR: 17
Reply 16, posted (3 years 4 months 2 weeks 5 days 11 hours ago) and read 14032 times:

Quoting commavia (Thread starter):
* All of Eagle's jets (and the associated debt) would pass to AMR ownership before the spin-off

So the new entity would just be a ground handling company? With no planes of their own, they are still being ruled by AA. This bites for Eagle.. but perhaps they could order some planes of their own (at least to start) for some at risk flights?

Quoting commavia (Reply 4):
* AA apparently can immediately terminate it's ground handling contracts with Eagle at 2 hub and 10 non-hub airports

Hmm.. which 2 hubs (LAX and JFK?) and which non-hubs?

Quoting commavia (Reply 4):
Eagle will continue to operate substantially all of its maintenance facilities

Last question.. where are they located?



Aiming High and going far..
User currently offlinebrilondon From Canada, joined Aug 2005, 4416 posts, RR: 2
Reply 17, posted (3 years 4 months 2 weeks 5 days 10 hours ago) and read 13940 times:

Quoting jamake1 (Reply 1):
I wonder how AA Eagle employees feel about this...



I imagine on the surface it might seem like they may be getting nervous but does this not give the employees more job security due to the fact Eagle will be able to become a more competitive airline on its own? Would this also not be like the AC spin off of Jazz into a separate corporation? These are the questions I have and if any body wishes to explain the differences between Canadian law in this area and US law I would really appreciate it.



Rush for ever; Yankees all the way!!
User currently offlinecommavia From United States of America, joined Apr 2005, 11983 posts, RR: 62
Reply 18, posted (3 years 4 months 2 weeks 5 days 10 hours ago) and read 13882 times:

Quoting ERJ170 (Reply 16):
So the new entity would just be a ground handling company?

No - it would operate just like many of the regional operators flying for other network carriers - the big airline owns the planes, they lease them to the little airline to fly them.

Quoting ERJ170 (Reply 16):
With no planes of their own, they are still being ruled by AA. This bites for Eagle

Hardly - this is a great deal for the new entity. They aren't saddled with all those increasingly-worthless RJs, nor with the associated capitalized ownership costs - all of that 'burden' will stay with AMR.

Quoting ERJ170 (Reply 16):
Last question.. where are they located?

According to the filing:

Following the spin-off, we will have the following significant dedicated facilities, which we will lease from third parties other than American:

• approximately 12,300 square foot maintenance hangar in Boston, Massachusetts;

• approximately 127,300 square foot maintenance hangar in Marquette, Michigan;

• approximately 23,000 square foot maintenance hangar in Springfield, Missouri;

• approximately 23,000 square foot maintenance hangar in San Juan, Puerto Rico;

• approximately 90,500 square foot maintenance hangar in Bentonville, Arkansas;

• approximately 77,700 square foot maintenance hangar in Columbus, Ohio;

• approximately 90,800 square foot maintenance hangar and an approximately 36,000 square foot office facility in Fort Worth, Texas; and

• approximately 232,400 square foot maintenance hangar in Abilene, Texas.

Following the spin-off, we will also lease from American additional maintenance hangar facilities located in New York, New York; Fort Worth, Texas; Los Angeles, California; Miami, Florida and Chicago, Illinois. Pursuant to the Transition Services Agreement, we will have the right to use approximately 40,000 square feet of office space, which will comprise our corporate headquarter facilities, located in Fort Worth, Texas.


User currently offlinewilliam From United States of America, joined Jun 1999, 1354 posts, RR: 0
Reply 19, posted (3 years 4 months 2 weeks 5 days 10 hours ago) and read 13883 times:

Actually good news for those tired of flying the older ATRs. The fact that prop flying will be up for bid so fast in 2012 says to me that AMR is wanting a different partner bringing in new aircraft on their own, and off the AMR books. AMR will just park the older ATRs in the desert. Maybe AMR is hoping whatever new carrier wins bring in some new Dash 8s, or newer ATRs .

User currently offlineERJ170 From United States of America, joined Apr 2004, 6791 posts, RR: 17
Reply 20, posted (3 years 4 months 2 weeks 5 days 10 hours ago) and read 13699 times:

Quoting commavia (Reply 18):
According to the filing:

Thank you! My curiosity has been filled.



Aiming High and going far..
User currently offlinenorcal From United States of America, joined Mar 2005, 2459 posts, RR: 5
Reply 21, posted (3 years 4 months 2 weeks 5 days 9 hours ago) and read 13522 times:

Quoting rdh3e (Reply 15):
If the APA decides to continue their current tack of very restrictive scope and pay rules (lets not forget they won't even let AMR buy 787's), then that "leverage" is going to mean squat during a bankruptcy or to the guy in the welfare line handing out their checks.

Bankruptcy laws have changed, AMR can't just rewrite the scope section if the declare chapter 11. Further relaxing scope is a sure fire way to end up in the unemployment line for APA pilots. Case in point, United, they replaced their entire 737 fleet with E-170s and CRJ-700s and tossed 1400 pilots out on the street.

Is there a deal to be made? Absolutely, but don't expect to see anything larger than 70 seaters at Eagle or American Connection.

Quoting ckfred (Reply 14):
What would AMR offer that could get APA to relas the Scope Clause? How about an order of 100-seat jets, to be flown by mainline? The smallest planes that Airbus and Boeing could potentially deliver to AA are around 125 to 130 seats.

That could very well be the deal that gets it done, though I wouldn't expect to see any net growth at Eagle. Probably ERJs for CRJs on a 1:1 basis with 100 seaters going to AA.


User currently offlinePRAirbus From Puerto Rico, joined Apr 2005, 1144 posts, RR: 1
Reply 22, posted (3 years 4 months 2 weeks 5 days 9 hours ago) and read 13519 times:

Too much noise about something IRRELEVANT since there are no buyers interested on American Eagle...anyway, customers will not even notice a change since there will be a long transition period to divest Eagle.

User currently offlinejfklganyc From United States of America, joined Jan 2004, 3630 posts, RR: 6
Reply 23, posted (3 years 4 months 2 weeks 5 days 9 hours ago) and read 13440 times:

"Hardly - this is a great deal for the new entity. They aren't saddled with all those increasingly-worthless RJs, nor with the associated capitalized ownership costs - all of that 'burden' will stay with AMR."


What spin. Former Eagle pilot here and this is a bad day for Eagle.

The company is being spun off with a flimsy flying contract from AMR with numerous outs.

Here's the long story short:

AMR will be diversifying its regional flying in the next 5 years. Eagle (or whatever they will be called) will have to competer for a piece of this pie.

This is a position that this regional has never been in before . . . and it will be a HUGE adjustment.


User currently offlinePRAirbus From Puerto Rico, joined Apr 2005, 1144 posts, RR: 1
Reply 24, posted (3 years 4 months 2 weeks 5 days 9 hours ago) and read 13367 times:

AA (APA) needs to be creative and find reasonable ways to relax its SCOPE clause, AA could easily fly many more markets w/smaller jets rather than relying on AE or even B6 codeshare to serve routes no longer profitable for "AA metal". SJU could easily become a focus city again; AA could fly some abandoned markets with smaller jets and make $. MIA also could have new routes too.

25 deltal1011man : or AMR is putting the cart before the horse like they have done many, many times 787 77W A320 737RE DFW-China. This, just like the 14 hour rule, is s
26 Alias1024 : Does it say what the official corporate name will be for the spun off carrier will be? With AMR retaining ownership of the American Eagle brand, I won
27 commavia : It is relevant, since this spin-off - not sale - is proceeding. AMR doesn't need to find a buyer to spin Eagle off to shareholders, nor do they need
28 brilondon : What would be the point of selling and contracting American Eagle to fly the commuter flights and then use the American Eagle brand to fly the same r
29 deltal1011man : Why should they? No reason at all that AA can't fly 70+ seaters at the mainline level.
30 PlanesNTrains : That'd be nice. If the 100 seaters were flown by someone other than mainline, the problem would be that instead of all those "new" flights, you'd see
31 MAH4546 : None of those are putting the cart before the horse. APA is having no problem with DFWHKG.
32 skyrat : I bet they feel quite a bit nervous. I know I would! But that's not a good question to ask on this board. I find most people that post on here could
33 PlanesNTrains : While I think there is some truth in that, it's pretty much that way anywhere other than an employee blogsite. I mean, I coudl think about any job I'
34 deltal1011man : er....yea it is. The way things are going with APA/APFA/TWU contract talks AA may end up with pretty 777-300ERs and no crew to fly them. (think Delta
35 Post contains images blink182 : I'm a little confused here-- If AMR owns the airplanes and the trademark "American Eagle," is MQ nothing more than a group of employees? Thanks for cl
36 commavia : Operationally, the new company will operate just like any airline that leases its aircraft - which is to say, for example, just like AA, which within
37 MAH4546 : There was no "epic fail." It is not very surprising that AA/IAG decided to put aggressive European expansion on hold in this economy and instead elec
38 bearste : I re-joined the site just because of this one statement right here. You are kidding, right? I'm a pilot in the DFW area (hint, hint...) and you are s
39 MAH4546 : I'm not kidding whatsoever. All indications are that negotiations have been going well this summer, even as discussed on other online, employee-orien
40 PlanesNTrains : From my perspective, if they are talking at all, things are going "amazingly well". Really. -Dave
41 MAH4546 : Seriously. It's hard to find a union in this country as uncooperative and unreasonable as the AA pilots, except maybe US Airways.
42 slcdeltarumd11 : LAX-COS would be a blessing. I fly this route and UA takes full advantage of its monopoly on the route! Lets hope that they decide to do this! Is it
43 MAH4546 : It is getting crowed, but the room is there for more flying. But the real determinate on expanding LAX flying again next spring is making LAX a CR7 b
44 F9Animal : Could this raise a red flag for customer service and ramp workers at AA? If Eagle is used as a major ground handling outfit, then Eagle could easily t
45 TUSAA : Exactly. One reason why the TWU represented ramp workers at AA have broken off talks with the company on a new contract. The TWU isn't going to agree
46 Post contains images F9Animal : Oh man, please tell me this is not happening. I should have known that there were sinister deals in the making. I understand the need to save money a
47 Alias1024 : The point would be to save money by putting the flying out for competitive bidding in a few years. Either the spun-off entity will win that bid, or a
48 commavia : Because people cost money! I'm not saying that to be cruel or crude - it's just reality - in any business, or indeed any organization (exhibit A: the
49 LAXtoATL : Well, technically poor management and lack of direction would be the fault of employees. Now maybe not the employees you are referring to, but still
50 Post contains images lightsaber : This spinoff, in my opinion, is simply preparing for a 'pre-packaged bankruptcy.' Reading through the above 47 replies, I notice one trend: AA isn't r
51 PlanesNTrains : I don't know. We hear plenty about employees at some airlines/hubs that seem to go out of their way to ruin the customer experience. We have seen car
52 caliboy78 : Quoting PlanesNTrains (Reply 40): Quoting PlanesNTrains (Reply 40): Quoting bearste (Reply 38): Amazingly well? Really?? From my perspective, if they
53 MEA-707 : excuse me if I ask a silly question but can anyone explain or confirm; This basically means that Eagle is still dependent on whatever AMR let's them d
54 norcal : It's not an airline, it's a staffing company. AMR is pretty much setting Eagle up to fail, especially if they get APA to relax the scope restrictions
55 Post contains links commavia : An interesting piece today from the ever-indispensable Dallas Morning News Airline Biz Blog on the spin-off - they talked to Garton (Eagle President)
56 ERJ170 : So is this saying American Eagle, as an independent airline, could not fly XNA-AUS if they wanted to? I can understand the hub-to-hub or even hub-to-
57 TOLtommy : Current contract makes it unprofitable. There's no way they could operate a E175 profitably at mainline costs. In theory, but the current cost struct
58 LAXtoATL : After the spin-off, Eagle will not need permission from AA. They will be a standalone company free to pursue any all opportunities outside of AA. The
59 commavia : Not exactly. AMR will not be able to direct business at Eagle, but AMR/AA will still be governed by the mainline AA (APA) SCOPE clause, which does ha
60 cubsrule : . . . which just means going out and buying a certificate from someone. Anyone see Eagle buying YV?
61 par13del : What about a/c, I assume they will have to buy a/c to operate non-AA business is anyone is so inclined to use their services.
62 commavia : Yes - if Eagle were to fly for another airline, they would obviously have to source the aircraft from somewhere, although it need not necessarily mea
63 flyby519 : Eagle already has two certificates, the Eagle certificate and the Executive Airlines cert. The current APA scope clause limits a feeder carrier from
64 cubsrule : That's also exactly why it's worthless for domestic use. There's no reason to have overwater on your CR7 or E70 doing ORD-OMA-DFW-ABQ-LAX-SAN.
65 TOLtommy : The original question was could they fly as an independent airline. As I said, I've heard nothing of them setting up a route planning department, let
66 Goldenshield : Only if they started up as BIG as XE did, but I don't blame XE for trying. They were put into a corner, and had to do something with those planes. Pa
67 Post contains images xdlx : How About Bringing these to Executive 2 for every ATR in SJU will bring about 18 of these to the SJU operation.
68 par13del : The ATR's are much cheaper to operate that the RJ's including fuel, the fares would not change based on the equipment deployed. Now the issue is whet
69 AirNovaBAe146 : +1. Why would anybody want to buy a regional airline with a cost structure that is above industry norm, and whose major airline partner is going to p
70 flyby519 : Maybe if they could start flying SJU-S. America with them, but intra-island stuff wouldnt work. In the end NewEagle wont do anything exotic like star
71 xdlx : Beg to differ! They are flying 66seat aircraft. If they replace them with 37seat airplanes the low fares in relation to seats is reduced, thus higher
72 FURUREFA : That's the killer. I don't have specific numbers, but there is a large difference between the CASM. Labor isn't the largest issue, each fleet service
73 jfklganyc : "2 for every ATR in SJU will bring about 18 of these to the SJU operation." Likely won't be a SJU operation (at least for AMR). AA will be down to SJU
74 xdlx : Extra Cargo ??? In the SJU-STT sector a .30min flight when the plane is full of pax. Executive charters another plane just for the bags that they "ca
75 cubsrule : MIA-JAX is only 1:36 if there's nasty weather in JAX. It's less than 350 miles.
76 xdlx : And you can ask the commuters that live in JAX how many times you end up driving 95.
77 cubsrule : It's not hard to find a MIAJAX flight (or v/v) that's less than 50 percent full. I used to use them a ton.
78 norcal : Those companies actually own some of their aircraft. Eagle will basically own nothing, the company might as well be a temp agency. Eagle is the next
79 commavia : And so will Eagle own some of their aircraft. The bottom line is that the structure and arrangement of Eagle will be basically exactly the same as ju
80 norcal : Which aircraft? I was under the impression AMR was retaining control of all of them and leasing them to Eagle.
81 commavia : Correction - Eagle will lease (EMB/CRJ) and/or sublease (ATR) all of their actively-flying aircraft from AMR. My mistake. However, I still don't see
82 flyby519 : +1 Without Eagle (or any regional for that matter) owning any assets, it must make it harder to get financing for new aircraft or financing for any r
83 B377 : There are a substantial number of out of service Saab-340 stored at ABI. Who will get ownership of them? AA or Eagle?
84 rdh3e : Yes and No. Because they also didn't have to take any debt from AMR. So they essentially get a clean balance sheet.
85 norcal : Other regionals own some of their aircraft. Except the market is entirely different now. Scope for larger more efficient aircraft is pretty much maxe
86 FURUREFA : And I think this highlights the difference between the new MQ and OH, XJ, EV, etc. Here at DL, we own some of the regional jets and we do lease these
87 par13del : I think the bigger question would be once the deal is done, why would any Eagle employee not run immediately to the job fairs and employement agencies
88 norcal : Even if Eagle ended up being the cheapest, AMR will still cut their flying just to not have all their eggs in one basket and avoid a Comair strike si
89 Post contains images commavia : I find it kind of comical that people are suggesting that because Eagle will lease all of its planes, as opposed to merely some of them like some of t
90 norcal : If they owned some aircraft, particularly the CRJ-700s, they'd have some leverage in negotiations with AMR. They could take the aircraft and fly for
91 commavia : But who are we kidding here? They would have almost zero leverage with AMR even if they did own the planes. You think that owning the unprofitable, m
92 TUSAA : Very nice Joseph.....care to name some names?
93 ckfred : You often find that the reason a company shows a senior executive the door, and then retains him as a consultant is to keep him from going to work fo
94 Post contains images FlyASAGuy2005 : I'm not sure that I follow but I am interested in what you mean. BTW, isn't AMR taking on an additional $1B in debt with this deal? All 3 you listed
95 LAXtoATL : He is suggesting that AMR is retaining all the aircraft in its name and will file bankruptcy and restructure or reject the lease terms. If the planes
96 cubsrule : To be clear, I was thinking of a relatively cheap certificate purchase a la CP/DH, not the purchase of a going concern, which would be both imprudent
97 Post contains images enilria : Mark my words, the ground handling is the only real value in this entity. I would not be surprised to see that become the company's only business lon
98 penguinflies : This deal sounds more like the Hawaiian deal when AA couldn't dump the DC10 fast enough. I think it will workout in Eagle's favor. With AA keeping th
99 commavia : Huh? I'm confused - unless I'm misunderstanding everything I've read thus far, it's actually quite the opposite - AMR is basically stripping Eagle of
100 enilria : I think fuel has completely killed the less than 50 seaters regardless of labor costs or lease cost cuts. You are right about at-risk, except I see i
101 longhauler : The big difference is that when Jazz was sold, the proceeds went to a third party, and not back to Air Canada. Apparently this was legal in Canada. T
102 Post contains links commavia : Another piece of semi-news today from the Dallas Morning News Aviation Blog: http://aviationblog.dallasnews.com/archives/2011/08/merican-aeagle-pilots
103 flyinryan99 : I was thinking the same thing - maybe mainline AA pilots should be taking lessons from Eagle. I thought it was a very well written letter and it show
104 Post contains images lightsaber : Below answered the details on the $1B. What it comes down to is AMR has too many obligations. I am very pessimistic on them being able to stay out of
105 FlyASAGuy2005 : You seem to be well educated in these dealings. Thanks for the explanation BTW. So essentially, because of labor contracts, they couldn't really go t
106 xdlx : Apparently the Executive certificate could be going to B6.
107 flyby519 : ??? Why would it go to B6, and why would they want it?
108 xdlx : ATR in the Caribbean?
109 glbltrvlr : It's not just creditors. AA has to convince the IRS that New Eagle is a viable company for at least two years or the transaction has tax implications
110 flyby519 : B6 seems to be doing fine with the E190s from SJU to points through the Caribbean. I cant think of too many destinations that Executive serves with A
111 par13del : Or maybe AA Management should look for a way to put their pilot group in the same position that they are putting the Eagle pilots. Eagle pilots see t
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