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AMR Starts to Drop Connection

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Uncle Don

Mar 15, 2002
This letter was sent to employees from Eagle's President on 14MAR02. It reads as follows:

March 14, 2002

Eagle Colleagues,

First, let me say thanks to everyone at Eagle for continuing to stay focused on safety and reliability over the past six weeks. Our operational performance so far this winter has been the best on record for Eagle. Despite the uncertainty created by the American Airlines Allied Pilots Association (APA) ASM cap issue, Eagle’s people have continued to perform their jobs with poise and professionalism.

I want to let you know that American has decided to focus the next phase of its ASM cap compliance efforts on the AmericanConnection flying in St. Louis. American intends to remove its code from selected routes operated by the American Connection carriers starting in the June/July period. Although there wil be some loss of connect traffic to American when the ”AA*” code is removed, American will continue to have a relationship with the AmericanConnection carriers and is working on plans to retain as much connect revenue from these carriers as possible. At this point American believes that the gradual removal of the AA* code from the STL regional flying will keep it in compliance with the ASM cap through the summer and well into the fall of this year. Because American will be in compliance with the ASM cap for at least the next six to nine months, we will not have to sell Executive Airlines or Eagle’s Miami operation at this time.

However, as we continue introducing new RJs into our fleet, unless there is a breakthrough in discussions between AA and its pilot union we may still be required to proceed with a sale of our Executive and Miami operations at some point in the future. In order to prepare for this possibility we have decided to move our Miami operation under the Executive Airlines operating certificate. In addition to preparing for the possibility of a sale in the future, a consolidation of our Miami operation into Executive Airlines will enable Eagle to benefit from reducing the number of fleet types. Similarly, Executive will become stronger and more efficient as a result of having a larger fleet of ATRs, which can be moved more easily between the Caribbean and our MIA network.

Because this issue has been of such critical interest to Eagle’s people we are sharing the news of this decision now even though we have not worked out all of the specific details about exactly how and when this integration is going to take place. I have named a team of SJU, MIA and Headquarters based managers to prepare a detailed plan to complete this integration process. This team will commence its work immediately. This job will need the close cooperation of people from many different departments as well as the FAA. Until this plan is completed it is difficult to say exactly what the timing of these changes will be.
Because Executive will continue to be owned entirely by American Eagle, pay and benefits, company seniority, travel benefits and the terms of our union contracts will continue unaffected by this change. For most of our people, the shifting of our MIA operation into Executive Airlines will have little impact. In fact, because MIA and SJU will be on the same FAA certificate, it will be much easier for crews, as well as airplanes to transition back and forth between these regions.

As I have said many times before, I hope that we do not have to sell Executive. I know that the uncertainty over the past few months has been a distraction for many of you. American’s decision to focus the next phase of the ASM cap compliance on the AmericanConnection carriers at STL means that we can focus our energies on safety, dependability and providing great customer service.

Although we continue to face a very tough economic environment as a result of the lowest average fares in over a decade, we are making gradual but steady progress in our return to profitability.

Thank you for your efforts,
Peter Bowler

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