AA scope / sale of Executive Airlines

[~~~^~~~]

APA INFORMATION HOTLINE
This is Gregg Overman, APA Director of Communications, with the APA Information Hotline for Thursday, January 31.
We have learned that AMR may be poised to sell some or all of Executive Airlines in an attempt to continue receiving Regional Jet deliveries and comply with the ASM cap in our contract. As you know, Eagle ASMs and block hours are required to be frozen at October 1, 2001 levels due to the furlough of American Airlines pilots, as stipulated in the commuter air carrier limitations section of our Scope Clause.
San Juan, Puerto Rico-based Executive Airlines has a separate operating certificate from the rest of the Eagle operation and is considered an international carrier. According to the rumor, in addition to selling some or all of Executive Airlines, AMR may also include some of Eagle's Miami-based assets in the transaction, including aircraft and pilots.

If this rumor becomes reality, rest assured that APA will protest the transaction as an attempt to sharp shoot our Scope Clause. We will keep you informed.

What is Executive Airlines? Are the Executive pilots on the Eagle seniority list? What effect would the sale of Executive have on mainline jobs? Is this just another illustration of how scope does not work?

Somebody familiar with this situation please enlighten us.

 

[FLYnMONKEYS]

Scope works just fine. In this case Eagle can't bring any more airplanes on property because of AA pilots on furlough. It keeps AMR from expanding itself in a lower paying version of itself. In other words no more RJ's unless they get rid of some planes. APA wants furloughed AA/TWA pilots to fly them. This will get interesting before it's all said and done. Go APA!!!

 

[EagleRJ]

Executive Airlines is Eagle's operation in the Carribbean, based in San Juan. The pilots are on the Eagle seniority list and move back and forth to the mainland Eagle freely. The airline is maintained as a seperate entity for tax purposes (supposedly), and because it is classified as an international carrier and performs overwater operations, which the mainland Eagle doesn't.

I think most pilots at Eagle support preserving the jobs at AA and preventing AMR from growing Eagle while shrinking AA. Where we differ in opinion is how the company is handling the ASM cap that protects AA flying. For years, there has always been one American Eagle (including Executive) feeding AA, and this is guaranteed by our contract. That portion of the contract is being flagrantly violated by the company in their outsourcing of Eagle flying to TSA and Chatauqua- this while 304 of our pilots are on the street.

When the APA proposed solving this problem by integrating Eagle into AA, the company flat declined even discussing the idea. We all found out today what their official game plan is. It includes taking seats out of some of the turboprops (!), reducing frequency in some markets, and pulling out of several altogether. Most of the "American Connection" service will remain. ALPA is fighting this on multiple fronts, and the game is by no means over. Hopefully the company will see an integration as the right thing to do, and will at least listen to ALPA and APA's ideas. For now, though, it looks like it's all going to be settled by the courts.

 

[Ameriagle]

In addition to this anouncement Eagle will discontinue service to 7 markets and start to remove seats from SAAB and ATR aircraft sometime this spring. These actions, it is reported, will keep us below the ASM cap until summer when further cuts in the Eagle system will take place.

Does this mean that AMR competition will be carrying revenue in these markets? Yes! Is this going to hasten AMR's recovery and get furloughed mainline pilots back in the cockpit any sooner? How could it? I realize that the APA contract needs to be respected. The question I have is what kind of leverage does it really give the APA? The jets are bought and paid for.....there placement in the system as apparently already been decided on. If AMR can operate a route more economically with an RJ it looks like they are willing to do it.......not without a cost to us pions of course!

Unfortunately as it all starts coming to a head so many more people are going to be losing their jobs! So now not only are some 800 odd APA families suffering thru a very trying time at least that many Eagle families it looks like will be getting a taste of it too! This is not a post to condem APA folks for protecting what is contractually theirs! It is just merely some of my thoughts, in an attempt to make sense of something that does not make a whole lot of sense to me!

 

[~~~^~~~]

Does this mean that AMR competition will be carrying revenue in these markets? Yes! Is this going to hasten AMR's recovery and get furloughed mainline pilots back in the cockpit any sooner? How could it? I realize that the APA contract needs to be respected. The question I have is what kind of leverage does it really give the APA?

Very true - it seems like the ASM limitations are simply mutual assured destruction. The pilots who hired on at AA knew they might get furloughed. They made the choice to leave their previous positions.

It is very unfortunate that AA pilots are being furloughed. However, why is forcing furloughs at the operators who feed AA the answer?

We may face the same thing at ASA soon.

 

[Draginass]

It does make perfect sense, I think. APA negotiated, and won acquiesence from AMR on ASM ratios, furlough restrictions, etc in the form of scope. That scope wasn't free, it was traded away to AMR for other concessions on the APA's part. The purpose of the scope was to prevent non-feed, and what should be mainline flying, from being transferred to a lower cost entity. AMR took a calculated risk that growth at AAL would make kick-in of ASM low risk for them. With 9/11 they declare force majuere, furlough mainline pilots in violation of the no furlough agreement last spring, and want to use RJs on what should be mainline flying. AMR agreed to this. APA says they will acquiese on the ASM problem, but only under specific conditions which would put some APA pilots back to work, like they would be sans the "force majuere" declaration.

1. If the APA acquieses to AMR on scope in return for nothing, while 595 of its members are on furlough, what does that say about it fiduciary duty to its membership?
2. Enforcing the scope provisions may result in hurting some AE pilots. Who does the APA have its primary responsibility to - it's own members or some other ALPA union?
3. The scope is good in the long run for AE pilots anyway, at least those that want to move to a major airline. With no scope, you can bet that AE would eventually be flying 777s on 16 year scopeless, no-strike contracts for $100 and hour for a 30 year Captain.
4. This is a very clear attempt by AMR lower the bar on pilot compensation. No doubt about it. It's got nothing to do with "feed."

AE's bellyache isn't with the APA, it with a lousy contract and the outsourcing of their jobs to American "Connection" contract companies.

As far as the so-called RJDC challenging scope, I think they'll lose handily. Besides, be careful what you ask for . . . . . you might get it.

Hopefully the biz will pick up this spring and make the ASM restrictions mute. But the prinicipal is there, and don't expect the APA to give away it's dearly paid-for scope for free.

 

[RSN]

BLAH BLAH BLAH

What is best for both pilot groups is one list! But APA was so fearful they would somehow be degraded and/or paid less by integrating a “one list” with AE pilots. All in the name of “JOB PROTECTION.”

Well, now APA is begging to get their hands on the RJs.

It looks like the BEST job protection would have been integration. OH WELL

APA made their bed, now they have to sleep in it.

As usual APA knows what is best for it’s pilots. NOT!
RSN

 

[Draginass]

RSN-

1. The APA has no power to force AMR into integrating AE into AAL. There is no financial incentive for AMR to do that, short of MAJOR compensation concessions by the APA. AMR will integrate the two companies when it is cheaper to run them combined vs. separate. With that 16 year no-strike contract, AMR has AE pilots by the short hairs.

2. APA is not "begging" for anything. The APA is merely trying to extract concessions from AMR in return for relaxation of the "paid for" scope provisions. The APA made an offer. AMR rejected it. Ok, then AMR believes it cheaper to live with the ASM and acft caps rather than an combined company.

3. I'm curious. What exactly would you like the APA to do, to entice or force AMR to combine AAL and AE? I keep hearing how wonderful a singlelist would be (and I would favor it), but just exactly how that going to be done? What is the financial incentive for AMR??? I've heard a lot of general carping, but no SPEICIFICS on how it's to get done from a PRACTICAL standpoint. For example:

APA goes to the mat on the next contract for integrate or we (APA) walks?? (AE can't strike for another 12 years or so)

APA makes major compensation concessions on the next contract to entice AMR to combine the companies??

Please educate me. I'm really listening.

 

[EagleRJ]

I haven't worked under AMR's roof as long as others, but one thing I have learned up to this point is that AMR loathes enacting any idea that is not their own. If integration is to have a chance, all three parties will have to embrace it. I don't see any way of enacting it by force.

I'm sure AMR was resistant to APA's proposal because they assumed that Eagle would demand retirement, equal benefits, crew meals, $150/hour RJ captains, etc. Not necessarily. I'm sure Eagle would be open to a plan that included fair compensation, fences for protection of seniority on both sides, and a future at AA. The main financial benefit for the company would be the removal of Scope. How many times a day do you think one of our flights doesn't make as much money as it could because of using the wrong airplane/ wrong frequency/ wrong company as demanded by Scope? Removing this restriction would make AMR a competetive pit bull. Naturally, any agreement would include limits on small jet flying, ensuring that they didn't totally replace narrowbody flying. I'm sure the company would see the possibilities here if they just sat down and thought about it, and it falls on both APA and ALPA to keep trying to convince them.

 

[~~~^~~~]

Draginass: First the RJDC is not against scope, but rather against ALPA's negotiation of restrictions on the Connection pilots without allowing them representation to their employer. The APA has no obligation to represent Eagle pilots. ALPA clearly does represent both the Delta and ASA and Comair pilots to the same employer - therein lies the representational dispute.

The RJDC is for effective scope - but what we have now is simply mutually assured destruction. If your scope is so great, kindly answer the following questions.
(1) Wouldn't all American brand flying performed by American pilots be effective scope?
(2) If scope works so well at forcing the Company to operate larger equipment at mainline pay rates, why not force American to operate 777's in all markets? After all, compared to a 777, the Folker 100 is a low compensation airplane that "steals" flying from better paying MD80's, right?
(3) How will you benefit by forcing the sale of American Eagle's assets in Puerto Rico? How will you benefit from their pulling seats out of ATR's and Saabs?

As you know Delta Connection is expanding rapidly in Dallas and going head to head with Eagle in several markets. The reduction in Eagle's capacity will simply funnel more passengers into the Delta system.

Which airline will grow Delta, or American, will depend on which airline comes up with a scope plan that allows the Company to deploy the right sized aircraft on the right route. If the Delta pilots are smarter than the APA they can benefit from the senseless attack of your feed from within.

With Eagle all you have done is established a C scale pilot who produces the same revenue seat miles you do. As long as the company has the choice of operating the C scale, they are not going to grow mainline, but rather cut ancilliary operations in places like Puerto Rico. The Saabs were never a threat to you, they only help you at mainline - but go ahead, kill your own feed - it helps us at Delta.

~~~^~~~