AMR selling Eagle

[IAHERJ]

Details are comming out slowly but CNBC just announced that AMR is going to sell Eagle by the end of the year.

 

[Marko Ramius]

Wow, this time it's for real-that sucks.

 

[FO 4 Life]

AA Press Release

 

[OzBushWhacker]

What a shock. Anyone else thinking they are ditching eagle to set-up for a merger?

 

[ReverseSensing]

Details are comming out slowly but CNBC just announced that AMR is going to sell Eagle by the end of the year.

End of NEXT year.

 

[TWA Dude]

I wonder if this is the real reason why AMR reneged on the Supp W TA.

 

[Turtlesfly]

Yup, probably.

I actually just wanted to get on the first page of a 10-page thread.

Hi!!!!

 

[Zipperhead]

What a shock. Anyone else thinking they are ditching eagle to set-up for a merger?

AA Merge? I think you need to lay off the crack pipe. The APA has already expressed in a side letter that they are not in support of any further mergers.

 

[glasspilot1]

I can hear the stampede already as the flowthroughs with a number are running for the exit!

 

[JetMonkey]

Reminds me the day Continenal spun off Continenal Express (ExpressJet). That was a somber day for all the guys waiting to flow up. Man, they were pissed.

 

[Bill Nelson]

Man, they were pissed.

Ya, the realization that all of their peers who had been telling them that they were morons for staying at a regional by choice all of that time were right.

It is one thing for your peers to think you are an idiot, but it is another when you figure out they are right.

 

[JAM-BRO]

Ouchie!!! Sounds Like A Bad Case Of Whipsaw!!!!!!

 

[ultrarunner]

Pretty interesting. Regardless of the spin of the press release, Eagle will ultimately have to bid for the flying it's already doing.

And, on the flip side, it will be in a position to compete directly with AA.

Very interesting.

Eagle's a pretty big outfit. Not many folks kicking around with that kind of cash to throw at an airline investment.

 

[Jmoney]

Mormons....

I think I know of some Mormons like Jerry Atkin who are sitting on crap-piles of cash. I must say I am not at all impressed with the honesty and decency with which they have run ASA into the ground. Maybe Eagle will be fortunate enough to not be purchased by these kind of Mormons.

-Good Luck!

 

[igneousy2]

Eagle's a pretty big outfit. Not many folks kicking around with that kind of cash to throw at an airline investment.

They didn't say they were SELLING American Eagle, they said they were DIVESTING it which is not the same thing. DIVESTING is a much broader term which includes selling as a possibility.

"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"


AMR will probably prefer to sell American Eagle but it is clear from the article that they know that it may not be a possibility. They will probably do an IPO or a stock-issue to shareholders or more likely a combination of the two with AMR still holding a substantial position in the newly formed company just like they did with SABRE.

Except for the few AA flow-through pilots, American Eagle pilots are FAR better off without AMR than with. If AMR had allowed Eagle to bid on flying after 9/11 like Skywest, Mesa, and Republic did, there would now be 6000 American Eagle pilots instead of the 3000 that they have today. While the independent Regionals have benefited from exponential growth as all of the legacies shed there domestic flying, the wholey owneds were parking airplanes, cancelling orders, and furloughing. American Eagle will now be able to ignore Americans' scope clause and not limit the flying it bids on.

AMR has been talking about selling Eagle since at least right after 9/11. If any American Eagle pilots are completely surprised then they weren't paying attention.

Later

 

[Bill Nelson]

American Eagle will now be able to ignore Americans' scope clause and not limit the flying it bids on.

I believe I may be dumber as a result of reading this post. AA's scope clause will not change. AE just won't be able to get a contract with AA unless it fits within this scope agreement. Nothing will change, except they will be able to bid outside of AA. The cost at AE are higher than the other regionals, so it looks like they don't have much choice.

They will end up flying the same stuff for AA, only at a reduced rate. Additional flying will be minimal at most.

 

[siucavflight]

American Eagle will now be able to ignore Americans' scope clause and not limit the flying it bids on.

I believe I may be dumber as a result of reading this post. AA's scope clause will not change. AE just won't be able to get a contract with AA unless it fits within this scope agreement. Nothing will change, except they will be able to bid outside of AA. The cost at AE are higher than the other regionals, so it looks like they don't have much choice.

They will end up flying the same stuff for AA, only at a reduced rate. Additional flying will be minimal at most.

UnfortunatelyAPAs scope specifically states that it applies to any wholly owned entity. I hope that Eagle does not get larger airplanes and take more of AAs flying then we already have. Dont get me wrong I like flying for Eagle, but if I am going to be flying mainline routes I want to make mainline money. But yes, a separate Eagle would be allowed around the scope clause.

 

[CaptJax]

AMR To Shed American Eagle

CHICAGO (Reuters) - American Airlines parent AMR Corp (AMR.N) plans to shed regional carrier American Eagle, the world's largest airline said on Wednesday, a move analysts say could generate cost savings and boost its share price.
High oil prices and a slowing economy threaten an industry recovery, and these uncertain market conditions coupled with falling shares have led some investors to call for AMR to boost its value. Responding to the announcement, AMR shares rose 6.9 percent to $21.98 on the New York Stock Exchange on Wednesday.
"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," AMR Chairman and Chief Executive Officer Gerard Arpey said in a statement.
The company said it is evaluating the form of divestiture, which could involve a spin-off to AMR shareholders, a sale to a third party, or some other form of separation from AMR.
Chief Financial Officer Tom Horton told Reuters the move would open up growth opportunities for American Eagle that are impossible now and sharpen AMR's focus on its core operations.
"It really just means that we'll be zeroing in on our mainline business," Horton said.
American Eagle operates about 300 aircraft, with 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 revenue of $2.3 billion.
The planned divestiture would include both American Eagle, which feeds American hubs in North America, and its affiliate, Executive Airlines, which flies to destinations in the Bahamas and Caribbean from Miami and San Juan, Puerto Rico.
COULD BE A DIFFICULT SALE
One expert said a sale of American Eagle at this point could be difficult for AMR. "I think it's a tough market in which to sell it because of the overhang of 50-seat aircraft," said airlines consultant Robert Mann.
"Whoever buys it is going to want an ironclad buy/sell arrangement with American, and American may want exclusivity, so there's a whole series of issues that have to get ironed out," Mann said.
Once the two airlines are separated, American Eagle would continue to provide American with regional flying, AMR said.
AMR has been under pressure to consider spin-offs as a way to boost its share price, which is down 27 percent this year. In September, FL Group, an Icelandic private equity group that owns 9.1 percent of AMR, called on the company to consider spinning off its frequent-flyer program.
"We welcome any initiative that looks to enhance shareholder value," an FL Group spokesman said on Wednesday.
In past sales of regional carriers, the parent airlines have derived some cost savings for mainline operations, said Morningstar analyst Brian Nelson.
"You're monetizing an asset in the face of an uncertain domestic market as well as very high jet fuel prices, so doing this could also help raise some cash in a time of need," he said.
Other airlines also are considering divestitures. UAL Corp (UAUA.O), parent of United Airlines, has said it might spin off part of its frequent-flyer program. Delta Air Lines Inc (DAL.N) has said it is considering the sale of regional unit Comair.
(Additional reporting by Chris Reiter in New York; Editing by Gerald E. McCormick and Braden Reddall) 11/28/07 16:24 ET

 

[catIIIc]

UnfortunatelyAPAs scope specifically states that it applies to any wholly owned entity. I hope that Eagle does not get larger airplanes and take more of AAs flying then we already have. Dont get me wrong I like flying for Eagle, but if I am going to be flying mainline routes I want to make mainline money. But yes, a separate Eagle would be allowed around the scope clause.

Wrong. look at Shuttle America and Go Jets these two entities were created so that CHQ and TSA could fly larger aircraft for United. They could not under the CHQ name or the TSA name because they flew 50 seaters for AA. Eagle may be able to fly larger aircraft for someone else under another certificate but not for AA.

AA's scope includes anyone that flies under the AA banner wholly owned or not. And don't you think if AMR could get around APA's scope with something like a domestic code share don't you think they would have already tried? Or if it only applied to Eagle why isn't Shuttle America or Republic already flying 170's for AA.

 

[siucavflight]

Wrong Cat, sorry looking at the current APA contract in front of me, includes wholly owned only, and the contract allowed Eagle to be the only carrier for AA. So the loophole is get rid of Eagle, now they are not wholly owned, but they are allowed to be the only carrier for AA under the current APA contract. Scope gone.
Wish it was not the case but it is.

 

[catIIIc]

Wrong Cat, sorry looking at the current APA contract in front of me, includes wholly owned only, and the contract allowed Eagle to be the only carrier for AA. So the loophole is get rid of Eagle, now they are not wholly owned, but they are allowed to be the only carrier for AA under the current APA contract. Scope gone.
Wish it was not the case but it is.

Then why was Shuttle America and GoJets created, sorry but you are still mistaken, and if they try that there will be alot of Silver airplanes parked in the near future. All this does is focus AA pilots attention on Scope again and I guarentee you the AA pilots will not give on this issue.

 

[siucavflight]

Sorry but you are still mistaken, and if they try that there will be alot of Silver airplanes parked in the near future.

Exactly my point, this is not good. I will not stick around Eagle and allow myself to whipsaw that APA, I will not do it. I hope it does not happen. I dont want to be a career regional pilot. I am out of here as soon as the right offer comes.

 

[duck_killer]

deleted

 

[Devil Dawg]

I can fly higher than an eagle rj and you are the wind beneath my wings. thank me thank me thank god for gerard the wind beneath your wings. that song always makes me tear up.

 

[GuppyWN]

Dude that's funny.

Gup

 

[siucavflight]

I can fly higher than an eagle rj and you are the wind beneath my wings. thank me thank me thank god for gerard the wind beneath your wings. that song always makes me tear up.

Wow, you spent a lot of time filling out the A/C flown section.

 

[catIIIc]

From another website with a interesting idea, discuss.

I think AMR has insider knowledge via the lobbyists in DC that premium slots at premium times will be too expensive to throw an RJ at the problem (current philosophy to maintain presence in markets not able to support a mainline jet year round). Divesting Eagle is shedding the albatross and a possible attack on Scope. If they had it there way, they would let Eagle do all the Domestic Flying and turn AAL in to an all transcon/international airline with a great many codeshare partners. Only we (labor) can stop them.

 

[siucavflight]

Cat, very interesting. And good points. I assume that you are an AA pilot. I hope that you do keep all of your flying on the AA side. I am sick of doing mainline stuff. Like ORD-JFK.

 

[catIIIc]

Cat, very interesting. And good points. I assume that you are an AA pilot. I hope that you do keep all of your flying on the AA side. I am sick of doing mainline stuff. Like ORD-JFK.

Nope furloughed from TWA/AA but now at CAL(who also has strong Scope Language) but just hate to see Scope eroded at any airline. CH11's at DAL,NW and UAL have set Scope back decades and it needs to stop somewhere.

 

[spacecadet1]

AA can't just codeshare with anyone for domestic service, wholly owned or not. They would have to negotiate with APA to do that. For example, the horizon and alaska codeshare. Fortunately the scope is pretty clear on this.