AABB777
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AA Selling American Eagle

Wed Nov 28, 2007 7:16 pm

Was just announced. Big news.
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FORT WORTH, Texas, Nov. 28 /PRNewswire-FirstCall/ -- AMR Corporation, the parent company of American Airlines, Inc., today announced that it plans to divest American Eagle, its wholly-owned regional carrier. AMR, which has been engaged in an ongoing strategic value review process, believes that a divestiture of American Eagle is in the best interests of AMR and its shareholders and will be beneficial to American, American Eagle, their employees, and other stakeholders.

The divestiture of American Eagle is intended to provide it with the structure, incentives and opportunities to win new business and provide new opportunities for American Eagle's employees. AMR also believes that the divestiture will enable American to focus on its mainline business, while ensuring American's continued access to cost-competitive regional feed. Once the two airlines are separated, it is expected that they will operate pursuant to a mutually beneficial air services agreement under which American Eagle will continue to provide American with regional flying of a scope and quality comparable to that provided prior to the separation and on terms that reflect today's market for those services.

AMR continues to evaluate the form of the divestiture, which may include a spin-off to AMR shareholders, a sale to a third party, or some other form of separation from AMR. The company expects to complete the divestiture in 2008; however, the completion of any transaction and its timing will depend on a number of factors, including general economic, industry and financial market conditions, as well as the ultimate form of the divestiture.

"The decision comes after a careful and deliberate evaluation of the strategy that will best enable us to continue to create value for our shareholders," said AMR Chairman and CEO Gerard Arpey. "We have worked hard over the years to build a regional airline that is fully capable of standing on its own and is well positioned to pursue growth opportunities outside of the AMR corporate structure."

Arpey noted that, in addition to AMR having put in place an independent American Eagle management structure, with a chief executive officer and chief financial officer, American Eagle also has a well-formed operational structure and organization and has produced independently audited financial results for the past several years. Earlier this year, American and American Eagle entered into a new regional flying agreement between the airlines that reflects market-based rates, which ensures that American continues to have access to quality feed on competitive terms. Arpey added that AMR's divestiture of American Eagle and the regional airline's ability to provide quality feed at competitive rates to other carriers, as well as American, will better position American Eagle to compete for new customers and growth opportunities in the future.

American Eagle is a fully developed operating unit providing a full range of regional airline services with excellent employees and a modern fleet. It operates approximately 300 aircraft, with approximately 1,700 daily flights to more than 150 cities throughout the United States, Canada, the Bahamas, the Caribbean and Mexico. In 2007, American Eagle expects to generate annual revenues of approximately $2.3 billion.

The planned divestiture would include both American Eagle Airlines, Inc., which feeds American Airlines hubs throughout North America, and its affiliate, Executive Airlines, Inc., which carries the American Eagle name throughout the Bahamas and the Caribbean from bases in Miami and San Juan, Puerto Rico.
 
ctbarnes
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RE: AA Selling American Eagle

Wed Nov 28, 2007 7:19 pm

Very surprising.

I wonder though, since AA and AE seem, from an outsiders view anyway, to be closely intertwined I wonder how AE will be able to funciton as a stand-alone entitiy. It would also depend on AA continuing to route passengers to AE flights. Would it be a codeshare arrangement? Could a stand-alone AE be profitable now that it has been separated from its parent?

Charles, SJ
The customer isn't a moron, she is your wife -David Ogilvy
 
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ERJ170
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RE: AA Selling American Eagle

Wed Nov 28, 2007 7:25 pm

Does this mean American Eagle can actually buy new aircraft of the size they want? Like some E70? E75?
Aiming High and going far..
 
elmothehobo
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RE: AA Selling American Eagle

Wed Nov 28, 2007 7:31 pm



Quoting Ctbarnes (Reply 2):
Could a stand-alone AE be profitable now that it has been separated from its parent?

Eagle has a relatively high CASM compared to other regionals, I'll find the stats. It'll take some work for Eagle to lowers its costs and become competitive with other independent regional carriers.

Quoting Ctbarnes (Reply 2):
Very surprising.

Talk of spinning off regionals went into high gear after the FL Group sent their no BS letter to the board of directors.
 
AABB777
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RE: AA Selling American Eagle

Wed Nov 28, 2007 7:32 pm

The Associated Press adds: Fort Worth-based AMR said in a statement that it is still studying whether to spin off Eagle to AMR shareholders, sell to a third party or divest the carrier in some other way. Although planned for 2008, the timing of the divestiture could be affected by the economic, industry and financial-market conditions, the company said.
 
EGFCabinCrew
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RE: AA Selling American Eagle

Wed Nov 28, 2007 7:35 pm

From our employee website:

In 2006, Eagle made money on the flying it did for American. However, as a regional airline flying under a capacity purchase (or fee for departure) agreement with American, Eagle's profitability is dependent upon its ability to operate regional aircraft at a cost significantly less than what American pays it to perform the operation.

AMR keeps the margin that it pays Eagle, since Eagle is wholly owned. However, as Eagle's cost gap as compared to other regional airlines grows, AMR and American could end up paying more to Eagle than they would for another more cost effective service provider. Furthermore, AMR's shareholders expect to earn a profit on the money invested in Eagle, just like other stockholders expect to earn a profit on their investments. If Eagle's margin declines below an acceptable level, AMR could decide to invest in other areas of its business, and let another company invest in the regional airline business.

Looks like American wants somebody cheaper...  indifferent 
 
rfields5421
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RE: AA Selling American Eagle

Wed Nov 28, 2007 7:37 pm



Quoting ERJ170 (Reply 3):
Does this mean American Eagle can actually buy new aircraft of the size they want? Like some E70? E75?

It should break the lock on the mainline pilot's union holding Eagle back from larger aircraft.

And allow the mainline to cut the number of aircraft they fly, and of course aircrews and support staff - though with the union attitude - I would not be surprised to see a strike over those issues.

They (AE) might even be able to take the ATR's back into their corporate structure.
 
elmothehobo
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RE: AA Selling American Eagle

Wed Nov 28, 2007 7:37 pm

Also interesting to note that the last time AMR prepared to spin off a regional, way back in 2003, they changed their mind and ended up holding on to OW.

It's a different market today, and the terms of the sale were for very different reasons, but who knows, what if AMR decides they are better off holding on to their regionals.
 
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Revelation
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RE: AA Selling American Eagle

Wed Nov 28, 2007 7:39 pm



Quoting AABB777 (Thread starter):
"The decision comes after a careful and deliberate evaluation of the strategy that will best enable us to continue to create value for our shareholders," said AMR Chairman and CEO Gerard Arpey.

"And another opportunity for me to give myself and the rest of the executive team a nice bonus for re-arranging the deck chairs"...
Inspiration, move me brightly!
 
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ERJ170
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RE: AA Selling American Eagle

Wed Nov 28, 2007 7:42 pm

Perhaps AA is getting themselves more in line to make themselves prettier for BA to buy them out? BA doesn't have an owned regional airline (do they), so they could be getting themselves in the same position? Just a thought..
Aiming High and going far..
 
AABB777
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RE: AA Selling American Eagle

Wed Nov 28, 2007 7:42 pm

It will be interesting to see 'how' it is 'sold'. Wonder if American Eagle, once out of AMR control, could fly regional routes for other mainline carriers - similar to SkyWest and others.
 
MAH4546
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RE: AA Selling American Eagle

Wed Nov 28, 2007 7:44 pm

Awesome news. AA needs this, and it will allow, hopefully, AA to explore more opportunities for regional carriers and expand regional flying. They have been heavily constrained in regional flying out of certain markets, especially Miami.
a.
 
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ERJ170
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RE: AA Selling American Eagle

Wed Nov 28, 2007 7:44 pm

Would "American Eagle" be the regional name or the airline's name? because "American Eagle" is sort of like "Delta Connection".. would they airline have to get another name (all called Executive or go back to their original name?)
Aiming High and going far..
 
MMEPHX
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RE: AA Selling American Eagle

Wed Nov 28, 2007 7:45 pm

If it is sold (note, the article refers to AMR reviewing their divesture options which may include a sale) who are the likely buyers? Management buy out? Mesa Group? Cost of credit at the moment might not be all that attractive to suitors if AMR are looking for a big cash sale.
 
mcdu
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RE: AA Selling American Eagle

Wed Nov 28, 2007 7:53 pm

AE being spun off does not guarantee that AE will be able to get larger planes for AE flying. The restriction is the scope clause in place by the APA (Allied Pilots Association) that represents the AA pilots. If AE wants bigger planes they would have to fly them outside of the AE code share. The scope clause is a GOOD thing. The more mainline jets the more ability for pilots to move up in the mainline system. Putting a bigger airplane at the regional only caps a pilots progression to that aircraft. Not too many enter the industry seeking to retire on an RJ. The only way to create more mainline jobs and to open up the 777's to the career path is to have pilots retire, add aircraft or add flying by optimizing the aircraft on hand.

The downside to the sell off is that AE could find itself broken up into several different carriers, much like the roots from which it arose. There could be several of the current regional players making bids for certain hub assets. This is just and example but you might see a company like Skywest bidding on the DFW ops. Republic/CHQ bidding on ORD and other companies seeking MIA and JFK. IMHO, I don't think there is any of the current carriers that want the entire operation. To keep it intact it will take a considerable amount of cash and not too sure someone really wants that type of out lay in expenses.

What could be the scariest part is that if you are currently an AE employee you could see AA put up for bid the AE flying. If that is the case then a company like Mesa or Skywest could work its way into the AA system by undercutting the new contract. Just hope this is not a dismantling of the jobs of the AE workers.
 
jacobin777
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RE: AA Selling American Eagle

Wed Nov 28, 2007 7:55 pm



Quoting Revelation (Reply 9):
"And another opportunity for me to give myself and the rest of the executive team a nice bonus for re-arranging the deck chairs"...

...what do you think Arpey will give himself this year? $5 million?  sarcastic 

For the umpteenth time, its the AMR board which decides bonuses...Arpey can only negotiate for his salary, stock options and bonuses....

Quoting MAH4546 (Reply 12):
Awesome news. AA needs this, and it will allow, hopefully, AA to explore more opportunities for regional carriers and expand regional flying. They have been heavily constrained in regional flying out of certain markets, especially Miami.

 checkmark ...I think this might be part of the reason for the potential divestiture...it certainly gives AA more flexibility....
"Up the Irons!"
 
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ERJ170
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RE: AA Selling American Eagle

Wed Nov 28, 2007 7:57 pm



Quoting MAH4546 (Reply 12):
They have been heavily constrained in regional flying out of certain markets

I can see Republic with 175.. moving the RJ from RDU and STL to MIA.. and having Republic flying all the STL and RDU flights... *cheesy grin*
Aiming High and going far..
 
777STL
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RE: AA Selling American Eagle

Wed Nov 28, 2007 8:02 pm



Quoting Jacobin777 (Reply 16):
...what do you think Arpey will give himself this year? $5 million? sarcastic

For the umpteenth time, its the AMR board which decides bonuses...Arpey can only negotiate for his salary, stock options and bonuses....

Dammit, Jacob, quit infusing this thread with logic and common sense. How many times do I have to tell you.... Big grin
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MaverickM11
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RE: AA Selling American Eagle

Wed Nov 28, 2007 8:04 pm



Quoting Mcdu (Reply 15):
The scope clause is a GOOD thing

There's no such thing. AA is not buy more mainline planes for mainline pilots to fly because of the scope clause--it's simply not flying any large regional jets beyond the few CR7s it can have, so instead of creating some jobs at American Eagle flying large regionals, it creates zero. APA effectively sells its regional brethren up river--how is that good for pilots?
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tjwgrr
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RE: AA Selling American Eagle

Wed Nov 28, 2007 8:07 pm



Quoting ERJ170 (Reply 13):
Would "American Eagle" be the regional name or the airline's name?

I kinda think the "American" would be dropped. They may operate solely as "Eagle" or the name may disappear all together depending on who the new owner is. I see management, Mesa Air Group or Republic Airways Holdings as a possible buyers.

How about Trans States Holdings purchasing American Eagle and incorporating them into GoJet?  duck 
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AJMIA
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RE: AA Selling American Eagle

Wed Nov 28, 2007 8:13 pm

AMR stock is up $1.75 to 22.31 at 310pm.

Not sure how much value is in it for share holders.

I hate to see American Eagle being split away but this is purely an emotional response.

I still have not digested what this is going to mean to AA overall.

I sure hope we do not sell AAdvantage too.

AJMIA
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AABB777
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RE: AA Selling American Eagle

Wed Nov 28, 2007 8:16 pm

Wonder if regional flights will still be 'operated by American Eagle' or could it change to a potential 'operated by Eagle' (if AE were to shed the 'American' part of the name)? Could AA use other regionals, such as SkyWest, for their regional operation?

Still not sure what I think of all this. Want to get more details on what 'exactly' will happen with AE.
 
TWFirst
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RE: AA Selling American Eagle

Wed Nov 28, 2007 8:17 pm

Will AA remain the largest airline by RPM after the divestiture?
An unexamined life isn't worth living.
 
thegreatRDU
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RE: AA Selling American Eagle

Wed Nov 28, 2007 8:18 pm

Is this good or bad?
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jacobin777
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RE: AA Selling American Eagle

Wed Nov 28, 2007 8:20 pm



Quoting 777STL (Reply 18):
Quoting Jacobin777 (Reply 16):
...what do you think Arpey will give himself this year? $5 million? sarcastic

For the umpteenth time, its the AMR board which decides bonuses...Arpey can only negotiate for his salary, stock options and bonuses....

Dammit, Jacob, quit infusing this thread with logic and common sense. How many times do I have to tell you....  biggrin 

.. rotfl ...silly me, how could I have made such a mistake.. biggrin 

Quoting ThegreatRDU (Reply 24):
Is this good or bad?

Good.. Smile
"Up the Irons!"
 
FlyPNS1
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RE: AA Selling American Eagle

Wed Nov 28, 2007 8:21 pm



Quoting Jacobin777 (Reply 16):
I think this might be part of the reason for the potential divestiture...it certainly gives AA more flexibility....

It does give AA more flexibility, but until the renegotiate the scope clause with APA, not much will change.
 
AJMIA
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RE: AA Selling American Eagle

Wed Nov 28, 2007 8:23 pm

Also have to wonder how this will effect AA and Eagle employee nonrev benefits on each others flights.
I hope D3s on each others flights dont go away.

AJMIA
Lady it's a jet... not a kite.
 
FlyASAGuy2005
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RE: AA Selling American Eagle

Wed Nov 28, 2007 8:25 pm



Quoting Ctbarnes (Reply 2):
I wonder though, since AA and AE seem, from an outsiders view anyway, to be closely intertwined I wonder how AE will be able to funciton as a stand-alone entitiy. It would also depend on AA continuing to route passengers to AE flights. Would it be a codeshare arrangement? Could a stand-alone AE be profitable now that it has been separated from its parent?

Charles, SJ

I don't see why not. AE is already such a large operation, I don't see why they won't be ok by themselves. It's not like it's an Independence Air outfit. Although I would have to say that it might be meneficial to them to be "taken under the wing" or merged with an existing regional holding company. OR it could turn out to be the next Skywest and start it's own holding company and do just fine.

Quoting RFields5421 (Reply 7):
It should break the lock on the mainline pilot's union holding Eagle back from larger aircraft.

It won't. I won't see why a new contract won't allow them to fly 900's but I don't see the E-Jets on the horizon with AA pilots closely watching.

Quoting AABB777 (Reply 11):
It will be interesting to see 'how' it is 'sold'. Wonder if American Eagle, once out of AMR control, could fly regional routes for other mainline carriers - similar to SkyWest and others.

I think so. I actually see them becoming its own holding company because it is already so large and I see them still doing the majority of their flights for AA. I don't think much ill change.

Quoting AJMIA (Reply 21):
I sure hope we do not sell AAdvantage too.

AJMIA

We can all wish friend. I however do see atleast one airline selling their program in the future.
What gets measured gets done.
 
EXAAUADL
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RE: AA Selling American Eagle

Wed Nov 28, 2007 8:27 pm



Quoting ERJ170 (Reply 3):
Does this mean American Eagle can actually buy new aircraft of the size they want? Like some E70? E75?

NOPE

Quoting ERJ170 (Reply 10):
Perhaps AA is getting themselves more in line to make themselves prettier for BA to buy them out? BA doesn't have an owned regional airline (do they), so they could be getting themselves in the same position? Just a thought..

that would be illegal

Quoting AABB777 (Reply 11):
It will be interesting to see 'how' it is 'sold'. Wonder if American Eagle, once out of AMR control, could fly regional routes for other mainline carriers - similar to SkyWest and others.

Yup
 
FlyASAGuy2005
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RE: AA Selling American Eagle

Wed Nov 28, 2007 8:31 pm

Ok, so let's start the rumors and speculations. Who do you guys have as potential buyers?

I say Mesa and possibly Skywest. But I am not sure if they have enough cash on hand right now and they are still dealing with the ASA buyout. But that would put them in a possition to pretty much corner the regional airline market.
What gets measured gets done.
 
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ERJ170
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RE: AA Selling American Eagle

Wed Nov 28, 2007 8:31 pm



Quoting FlyASAGuy2005 (Reply 28):
It won't. I won't see why a new contract won't allow them to fly 900's but I don't see the E-Jets on the horizon with AA pilots closely watching.

Eagle is going to have to do something.. the days of the 50 seat RJ are dying out.. yes, there will be markets where the 50 seat RJ will work (and some 35/40 seat RJ), but the industry has turned back towards larger aircraft.. thus why you see Republic Holdings doing so well.. thus why you see Comair, Pinnacle, Colgan, Mesa, etc moving towards larger aircraft and not 50 seaters.. Eagle has over 300 aircraft and less than 25% are over 70 seats.. if they want to really pimp themselves out for contract, they are going to have to ditch some 50 seats and move to 70+.. and since they are VERY in with Embraer.. the best choice for them would be ordering E70, E75, and E90... Hopefully, they can hook up with Delta, Sun Country, Bahamasair, Cayman Airways, US Airways, AND Virgin America (since their guy just went there).... they need to get themselves OUT there!

but that's just my opinion..
Aiming High and going far..
 
FlyASAGuy2005
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RE: AA Selling American Eagle

Wed Nov 28, 2007 8:33 pm

As a side note, I would also like to add that my prefered outcome would be to see AE start their won holding company but what would that take. A group of investers offering AA a deal and not spinning AE off but actually starting an AE (or Eagle) holding company? A good way for some folks to get in teh business without having to start from the ground up.
What gets measured gets done.
 
EXAAUADL
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RE: AA Selling American Eagle

Wed Nov 28, 2007 8:33 pm



Quoting ERJ170 (Reply 31):
Eagle is going to have to do something.. the days of the 50 seat RJ are dying out.. yes, there will be markets where the 50 seat RJ will work (and some 35/40 seat RJ), but the industry has turned back towards larger aircraft.. thus why you see Republic Holdings doing so well.. thus why you see Comair, Pinnacle, Colgan, Mesa, etc moving towards larger aircraft and not 50 seaters.

youre right but APA isnt always living in the present
 
xtoler
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RE: AA Selling American Eagle

Wed Nov 28, 2007 8:37 pm



Quoting Tjwgrr (Reply 20):
How about Trans States Holdings purchasing American Eagle and incorporating them into GoJet?

Had to go there didn't ya? Okay, it was on the tip of my mind too, only if it got the CRJ7's. Although I think some of the Eagle 145's did go to American Connection under TSA, back in the day. I'm sure Hulas is keeping a close eye on this.
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STT757
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RE: AA Selling American Eagle

Wed Nov 28, 2007 8:47 pm



Quoting MAH4546 (Reply 12):
Awesome news. AA needs this, and it will allow, hopefully, AA to explore more opportunities for regional carriers and expand regional flying. They have been heavily constrained in regional flying out of certain markets, especially Miami

Perhaps Expressjet could go down to Miami, or better yet drop DL in favor of AA out of LAX.
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N1120A
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RE: AA Selling American Eagle

Wed Nov 28, 2007 8:56 pm



Quoting ERJ170 (Reply 3):


Does this mean American Eagle can actually buy new aircraft of the size they want? Like some E70? E75?

No, because that is still based on AA's pilot contract.
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
 
PSU.DTW.SCE
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RE: AA Selling American Eagle

Wed Nov 28, 2007 8:57 pm

Here's my take on this matter:

AA has a huge obligation over the next decade to begin to replace a significant portion of their mainline narrowbody fleet, as well as obtain more widebodies, as well as obtain more 70-100 aircraft to right-size some of their markets.

As it stands right now, Eagle's fleet mix is not ideal for AA's operations due to the lack of 70 seaters, and a large number of 37 & 44 seat RJ's.

Right now a lot is up in the air because of pilot negotiations and status quo in terms of Eagle's fleet mix can't change until that is settled.

By selling off Eagle, and putting its regional flying up for bid, they can quickly obtain 70-100 aircraft by starting the bidding war the minute the scope clause issue is settled. This also removes the huge capital investment of AA to get the 70-100 seaters into their fleet, allowing them to focus more on the narrowbody & widebody fleet renewal.


Is this good or bad? That depends on your perspective. Right now a lot more questions than answers. Also remember this isn't the first time AA has been looking to shop around for a buyer of Eagle. Although I believe this is the first time they've issued a press release. I think a lot of this is going to depend on what the market thinks going forward.

Plus all of the speculative merger talk plays into this matter. If any of the legacies do attempt to merger, there will be a lot of excess regional capacity and the regionals could become desperate to find a home for their high-cost, relatively new (mostly 50 seat) RJ's.
 
MAH4546
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RE: AA Selling American Eagle

Wed Nov 28, 2007 8:58 pm



Quoting STT757 (Reply 35):
Quoting MAH4546 (Reply 12):
Awesome news. AA needs this, and it will allow, hopefully, AA to explore more opportunities for regional carriers and expand regional flying. They have been heavily constrained in regional flying out of certain markets, especially Miami

Perhaps Expressjet could go down to Miami, or better yet drop DL in favor of AA out of LAX.

What they need in Miami is a regional operator with 70-90 seaters, like the E-170, to fly routes like MIA-PVD/BUF/ROC. AA doesn't have the right planes to fly that. The those E-Jets would be perfect to upguauge MIA-CMH/PIT/RIC/ORF.
a.
 
ckfred
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RE: AA Selling American Eagle

Wed Nov 28, 2007 9:13 pm

What this does for Eagle, in the long run, is allow it to go after flying for other mainline carriers. And if it does get regional flying for other carriers, it can certainly buy more aircraft, including aircraft with more than 70 seats.

It seems to me that AA and the APA must do some negotiating on the Scope Clause, simply because AMR will probably contract with other regional carriers at some point in the future. Obviously, the max. seat restriction still applies, but the restriction on the number of planes that Eagle can operate no longer applies. It probably will be something like the number of flight segments flown by regional carriers, compared to the number of flight segments that AA flies.

What will be interesting is how AA staffs RJ gates at its hubs. Correct me if I'm wrong, but doesn't UA now use its employees to handle some functions at the RJ gates at ORD?
 
EXAAUADL
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RE: AA Selling American Eagle

Wed Nov 28, 2007 9:22 pm

I am surprise no one has said the eagle spin off it so AMR can raise cash to merge with someone
 
AABB777
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RE: AA Selling American Eagle

Wed Nov 28, 2007 9:27 pm

Right now there is too much speculation. I hope more details emerge over the next few days & weeks. I'm trying to get more info from my folks.

My hope is that 'Eagle' stays as is - as one large regional airline - and is purchased by someone with enough $$ to do so. Who that buyer may be is the biggest question.

I would like to see Eagle expand with new 70+ seater a/c, adding an F class.

Hopefully this eventually gives AA the $$ it needs to begin purchasing new a/c to replace those aging MD80s (tho I am a fan) and perhaps an order of 787s could be on the horizon.
 
hiflyer
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RE: AA Selling American Eagle

Wed Nov 28, 2007 9:37 pm

First off this is about two things IMHO
A Get the high casm operation off the AMR books while it may still have some value...DL has done it with ASA for instance. THis get's the investment groups off the board's back for a bit...especially the Iceland guys.

B Take away a very thorny labor issue at a time that AMR's AA is going into negotiations with their groups...some of those also rep Eagle groups. Division is a normal negotiation tactic. Scope is going to come in here in a big way as well.

Secondly despite the title of the thread AA is not selling....AMR (the corp) is looking to divest...there is a substantial difference.

Third...AMR restructured Eagle last year to force it to bid competitively they stated to help AA costs....if that had worked then there would not be this divestment.....obviously AMR needs to bring in carriers with far lower costs for AA to remain competitive. Expect the 170.

Lastly, with the union scales currently at Eagle I cannot think of any existing carrier in the regional field that would be willing to accept those costs as they stand now which is why the divest talk. Eagle will have to chapt 11 to break the contracts to get costs down and then be a suitable pickup for any other low cost nonunion express operator or to be able to make a reasonable bid to pickup work for another carrier against those same carriers.
 
ebs757
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RE: AA Selling American Eagle

Wed Nov 28, 2007 9:37 pm

Just called mom on the plane to she if shes heard the news and of course she has. She said thats all her and her colleagues have been talking about today. (she works for AA) Hopefully Eagle stays "Eagle" and they expand somewhat with bigger aircraft and new routes. She will be home late tonight I will hopefully get some more info
Viva la Vida
 
iwannagothere
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RE: AA Selling American Eagle

Wed Nov 28, 2007 10:14 pm

Does anyone think this will be bad for AA fliers? Eagle would have to cut many lower profit routes eg. carribean ect. and how could AE work for airlines like US or DL when most of Eagles planes fly out of DFW, ORD, STL, and MIA?
 
EGFCabinCrew
Posts: 2
Joined: Wed Nov 28, 2007 6:22 pm

RE: AA Selling American Eagle

Wed Nov 28, 2007 10:26 pm

From Peter Bowler:

SPECIAL EAGLEWIRE FOR NOVEMBER 28, 2007 Published Especially for the Employees of American Eagle * * * * PLEASE POST ON ALL BULLETIN BOARDS * * * * November 28, 2007 Dear American Eagle and Executive Employees,

As part of an ongoing review of strategic assets, AMR Chairman and CEO Gerard Arpey announced today that AMR plans to divest American Eagle, including Executive Airlines. A copy of the AMR press release containing this announcement is attached.

The most important aspect of today's announcement is that American Eagle will continue to be a regional partner of American for years to come. We expect to fly the same planes, continue to serve the same hubs we do today, and fly the vast majority of our current routes. We intend to honor our collective bargaining agreements and for most of our people, their jobs will change very little as a result of this announcement.

AMR has hired an investment bank to advise it on this topic. However, it has not yet decided what form the divestiture might take. Among the options being considered is a distribution of shares of Eagle stock to existing AMR shareholders or sale of Eagle to another company or investor. Because these decisions have not been made, it is impossible to know precisely when Eagle's ownership will change, but AMR expects that it will take place some time in 2008.

I've been assured that AMR will evaluate the options carefully and make a decision on the form the divestiture will take as quickly as possible.

Regardless of the form of the separation, the most important thing determining our individual and collective success will be our ability to continue operating an excellent airline. Our commitment to safety must never waver. Our reliability and the quality of our customer care must demonstrate to American that we are the best regional partner they could have.

Today's announcement is an important step in the process of gaining greater control over our future. We will be able to compete for flying agreements with other airlines on a level playing field, something we have not had the opportunity to do in the past.

Eagle has extraordinarily capable people and we have a great partner in American. These two strengths will be critical as we work together to implement our Plan to Win strategy and assure our success over the long term.

We will communicate more in the weeks and months ahead as decisions are made on the timing and nature of the transaction and as our plans become more definite.

Sincerely,

Peter Bowler President and CEO
 
MAH4546
Posts: 24521
Joined: Wed Jan 24, 2001 1:44 pm

RE: AA Selling American Eagle

Wed Nov 28, 2007 10:26 pm



Quoting Iwannagothere (Reply 43):
Eagle would have to cut many lower profit routes eg. carribean ect.

Huh? The Caribbean operations are some of the most profitable in the whole system. Eagle gets $220+ round-trip easily for Miami-Nassau, and the flight is barely an hour long. And fares on short intra-Caribbean hops are even higher.
a.
 
hiflyer
Posts: 1270
Joined: Wed Nov 24, 2004 1:38 am

RE: AA Selling American Eagle

Wed Nov 28, 2007 10:44 pm



Quoting EGFCabinCrew (Reply 44):
we work together to implement our Plan to Win

 rotfl   rotfl   rotfl 

Corporate Speak for do your jobs and don't pay attention to the 'water' rising down in the lower decks.
 
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RedTailDTW
Posts: 603
Joined: Tue Oct 24, 2006 12:08 pm

RE: AA Selling American Eagle

Wed Nov 28, 2007 11:04 pm

I think this is good for American. Gives them a chance to operate with different carriers and allows American Eagle to get contracts with other major carriers.

My question would be who gets the "American Eagle" name? Would American keep using it for their regional carriers or would Eagle be able to keep it and American would have to use "AmericanConnection" for all regional flights?


Anyway, good news for AA and Eagle.



Mason
Airlines Flown: AA, CO, HP, MQ, NW, RP, UA, US, WN, YX / Aircraft Flown: 737-200/300/700/800, 757-200/300, 777-200, A319/A320/A321, DC-9-30/50, DC-10-40, ERJ 140/145, E170, MD80/83/90
 
MAH4546
Posts: 24521
Joined: Wed Jan 24, 2001 1:44 pm

RE: AA Selling American Eagle

Wed Nov 28, 2007 11:13 pm



Quoting RedTailDTW (Reply 47):

My question would be who gets the "American Eagle" name? Would American keep using it for their regional carriers or would Eagle be able to keep it and American would have to use "AmericanConnection" for all regional flights?

The American Eagle brand name is perhaps the strongest and most well-known of any regional airline. I would assume that American's regional flights operated by MQ and OW will keep the American Eagle name.
a.
 
quickmover
Posts: 2134
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RE: AA Selling American Eagle

Wed Nov 28, 2007 11:16 pm

I wonder if this is good news, bad news or no news for cities like STL, that are mostly Eagle?

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