AA scope / sale of Executive Airlines

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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!

 

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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.

 

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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.

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[dispatchguy]

Here's the PR announcement from AA.com

AMERICAN HONORS CONTRACT CAPPING REGIONAL CARRIER ASMS

Regional Affiliates Undertaking Numerous Initiatives Designed to Minimize Impact on Customers and Employees

FORT WORTH, Texas – American Airlines today announced that its regional affiliates, American Eagle and American Connection, are undertaking numerous initiatives to reduce the number of available seat miles (ASMs) they fly. These steps are required to enable American to honor its contract with the Allied Pilots Association (APA), which limits the number of ASMs flown by American’s regional affiliates while APA members are on furlough.

American Eagle’s president, Peter Bowler, outlined in a letter to employees the steps that carrier is taking to reduce ASMs. These include:

Soon removing some seats from Saab and ATR aircraft. By taking these seats out of these planes, Eagle can reduce ASMs without any impact to employees or routes.

Accelerating jet-for-prop replacements on some routes earlier than planned.

Reducing frequencies (the number of trips per day) on routes across the system. These frequency cancellations will be phased in starting in April.

Withdrawing from seven routes on April 7: Dallas/Fort Worth to Beaumont/Port Arthur, Texas; Dallas/Fort Worth to Lafayette, La.; Chicago to Baton Rouge, La.; New York JFK to Cleveland; New York JFK to Syracuse, N.Y.; Boston to Albany, N.Y.; and San Juan, Puerto Rico, to Barahona, Dominican Republic. These routes are Eagle’s weakest financial performers.

Closing two American Eagle stations – Beaumont/Port Arthur, Texas, and Lafayette, La. – on April 6 as a result of the route cancellations.

Together with actions taken by the American Connection carriers serving American’s new St. Louis hub, these initiatives will bring the airlines in compliance with the ASM cap through the end of June without further station or route closings.

Bowler stated that American Eagle remains committed to its primary mission of feeding traffic to American Airlines flights, which is especially critical as American tries to rebuild following the airline industry’s severe downturn.

However, Bowler stated that additional ASM-cutting initiatives would be required as American Eagle continues to take delivery of approximately three new regional jets per month and would again bump up against the cap in July.

Among the options that American Eagle is evaluating are a number of potential alternatives involving the carrier’s Miami operations and Executive Airlines, which flies as American Eagle in the Caribbean but under a separate operating certificate. The options range from changing the codeshare agreement with American all the way to the potential sale of some or all of these aspects of Eagle.

No final decisions have been made, and the carrier continues to explore all available avenues to allow American to honor its contractual commitment to the APA .

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How neat, AMR'll honor their precious contract with APA, but god forbid if they were to do it with any other group.

 

[FLYnMONKEYS]

Re: BLAH BLAH BLAH

What is best for both pilot groups is one list!

One list would be fine for me. I'll take left seat in that RJ 700 and you can all move back. sounds great, beats being on furlough. Don't forget with that one list you would be behind TWA pilots also. Still sound good?

 

[publisher]

Not going to happen

This is one of those non discussable issues as far as AA is concerned. The only way this will ever happen that I can see is if they totally merge both companies and that is unlikely.

 

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Withdrawing from seven routes on April 7: Dallas/Fort Worth to Beaumont/Port Arthur, Texas; Dallas/Fort Worth to Lafayette, La.; Chicago to Baton Rouge, La.; New York JFK to Cleveland; New York JFK to Syracuse, N.Y.; Boston to Albany, N.Y.; and San Juan, Puerto Rico, to Barahona, Dominican Republic. These routes are Eagle’s weakest financial performers.

As a Delta Connection pilot who feeds passengers into Delta, let me express a big THANK YOU to my friends at the APA who are busy cutting off thier nose to spite their own faces.

We can use the extra business and Delta can use the extra load factor. If I'm not mistaken that will leave Beaumont, BTR, LFT with only one jet operator (if we return to Beaumont) and of course less competition all around. Higher prices / less competition and Delta growth - Thanks APA

 

[monkeyboy]

Down with scope - up with hope

My bold prediction: Eventually there will be no more "regional airlines".

This latest happening is another development in coming closer to the inevitible - which is - no more regional carriers as we know them today.

First of all, lets ask the question - what is a regional carrier? It used to be that regionals would feed the hubs of the majors. Now regionals are flying the routes of the majors. It used to be that regionals only had turboprops. Eventually they will be all jet.

So what is a regional now? It's merely a low cost subsidiary of a major airline. The lines between regional and major are very blurred and its becoming more and more so.

What is the difference between a CRJ 70 and a F - 100? About 30 seats. What is the pay rate difference? I believe an FO on a F 100 makes more that a Captain on a CRJ? Does this make sense?

There used to be a large perceived difference in what a commuter pilots job and a major airline pilots job. Now there is absolutely no difference (Except that a commuter pilots pay, benefits and schedule are less).

So now you may as well consider the regionals "C scale pay airlines".

I think APA and AlPA national are starting to understand that there should be no excuse for letting such poor working conditions exist for any airline pilot. And the only way to stop the expansion of low cost carriers (Wholly owned by the majors no less!) Is to bring up the pay scales for all pilots.

The only way to do this is pilot unity - and I do mean all pilots.

The combining of both lists is a win situation for all parties involved. American pilots would not loose any seniority. And they would gain flexibility by being able to bid "Regional Jets" if they chose. AE pilots would not have to worry about anybody else moving ahead of them eventhough they have been working for AMR for years. And yes "the company" would benefit by being able to fly whatever they want where they want. Not to mention the increase in employee morale and the more unified feeling of the employees. And of course American would be able to expand again.

Of course the bean counters just look at the cold hard numbers and have no idea what supposedly saving a couple of bucks does to pilot morale and productivity.

 

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Monkeyboy - good post!

 

[Draginass]

Ah, now I see! It's all APA's fault. No responsibility on regional pilots for signing labor contracts for sub-par compensation. It's very easy to blame other groups while you willingly work for sub-par compensation.

While it seems that our regional collegues know what needs to be done, but don't have even a clue on how to do it as a matter of practicality.

 

[Ameriagle]

It is a case of the "tail wagging the dog" at this point. It is a poor mess AMR is in.

Another reality is this: AMR and Eagle has the Brazilians and Canadians pumping out RJ's as fast as they can. The financing for these aircraft has long since been in place and no doubt the routes they will be utilized on have been decided. So now Eagle starts to bump up against an ASM cap that was negotiated in APA's last contract. The question I have for the APA members on this board is how effective is your scope clause really? To date NO JET ORDERS have been deferred. If your narrow body flying is being outsourced, to RJ's, well it is just gonna happen cause the jets are on the way. Many of the routes flown by the RJ are the point to point legs that you are trying to protect. What, in my humble opinion, could contribute to the long term health of AA is the turbo-prop routes that still truely feed the mainline carrier. These are the routes AMR is willing to sacrafice to keep within the guidelines of your SCOPE! How does that serve APA's best interest and in anyway help your pilots back into the cockpit?

Unfortunately many good folks are about to lose their jobs needlessly and that is the shame of the whole thing. As stated in an above post (from an assumed APA member)....we operate in a capacity to help ourselves first......apparently no matter what the cost to others....or in this case themselves it seems!

 

[FOAgain]

Believe it or not, there are many here at Eagle that fully and completely support the APA pilots. They were smart enough to see this coming when they wrote the SCOPE clause. I applaud them for not backing down under AMR's heavy media pressure.

How can an Eagle pilot complain about our outsourcing, and in the same breath, blame APA for all that is happening?

AA Connection is to Eagle as Eagle is to APA

Integration is the answer. This would not be easy, but in the end, I think it would make a very strong airline. I think most Eagle pilots would be satisfied with our current pay/benifits if we knew we were AA pilots, and could eventually bid directly into AA aircraft. How does this cost the company more? It doesn't. They could completely cut AE management thus saving even more money.

AMR's biggest concern is that we would fight to raise the pay of RJ pilots and put them in line with mainline wages. It will never work without the "new B scale."

 

[Draginass]

The APA membership will never go for another B-scale. The bitter taste of the last one made sure of that. If integration occurred any new aircraft would have negotiated rates of pay just like any other aircraft. However, benefits, retirement, etc. must be uniform.

APA isn't going to give away scope. Period, dot. The ASM cap and acft cap will hold, and AMR has said (at least until they change their mind) that they will respect the scope clause. (Why? Not because they're nice guys, but because they know they'll lose in court.) The ball is in AMR's court. If they decide to cut feed and damage their core business, ok -- but I think that's an empty threat. AMR can order all the RJs they want, but they aren't going to fly them past the ASM/acft caps. You guys seem to be genuflecting to the alter of the RJ, but in many analyst's opinions, it's a relatively short-term phenonoma. Part of the future, but not THE future. As ridership and air traffic conjestion increases, small jets will decrease in importance.

AE ALPA's real threat is the outsourcing of their jobs to the likes of CHQ and TSA.

One more time . . . can any regional guy out there tell me, in practical and specific terms, how AE and APA would force/convince AMR to integrate? With AE's 16-year no-strike contract, what legal leverage does AE ALPA bring to the fight????? None of you guys seem to want to answer that. What's YOUR contribution to the fight??? You guys can't keep your own jobs from being outsourced, so you want APA pilots to put on furlough while AMR substitutes cut-rate RJ labor for mainline flying??

Still waiting for a rational, fact-based, legally valid, management acceptable and union acceptable solution.