AMR to say "Buh Bye" to Eagle?

[skootertrash]

I hate to admitt it but for us Express Jet guys this was a good thing. Except for the fact that we lost the Flow Through Agreement, we now have the ability to stay profitable. Had we still been owned by CAL we wouldn't have seen any increases in wages and benefits. Now that we are separate Express jet can't cry poverty and say they can't pay us.


Plus CAL has been able to milk 450 million bucks and still hold on to the service we provide. And they now have the ability to whipsaw us against any other regional who's willing to fly for sh11t wages (thank you MESA/CHQ). It sucks for the pilots but as far as being a buisness decission it is a sound one.

 

[rumorhasit]

Keeping in mind that I don't follow the stock market... So pardon my ignorance.

How did Continental achieve "success" or "make a nice profit" on the CoEx sale? I just checked the stock price and it's hovering around $11. The IPO was for $16, wasn't it?

I believe Continental is still in possession of 40-50% of the stock, and I'd think with a 33% drop in the stock price as compared to the IPO would be a LOSS.

Someone help me out here....

unfortuantly you are wrong...Cal owns approx 30% and the sale added to CALs bottom line...They now have a better balance sheet because the losses are no longer off setting the gains by continental express when they were both the same company. They can now use losses for tax breaks and whine about things...

 

[FDJ2]

True! Why don't they sell mainline and keep the profitable part, Eagle?

They certainly could do that I suppose, but management hasn't floated that idea, but they have floated selling Eagle. Here's a question for you, how "profitable" would Eagle be without AA to feed? I suspect an overwhelming percent of passengers on Eagle connect on to a mainline jet, whereas most AA passengers never step foot on Eagle.

 

[tk855]

Hey Skootertrash,

I love the following line in your post, it really hits the nail on the head. You said, "I hate to admitt it but for us Express Jet guys this was a good thing. Except for the fact that we lost the Flow Through Agreement, we now have the ability to stay profitable."

You have no idea how bad us guys at eagle really want to get rid of our flow through agreement. From our point of view, there would be no bad part of losing the flow through!

tk

 

[PacoPollo]

Hey Skootertrash,

I love the following line in your post, it really hits the nail on the head. You said, "I hate to admitt it but for us Express Jet guys this was a good thing. Except for the fact that we lost the Flow Through Agreement, we now have the ability to stay profitable."

You have no idea how bad us guys at eagle really want to get rid of our flow through agreement. From our point of view, there would be no bad part of losing the flow through!

tk

Easy there cowboy...If Beagle gets sold, that 16year POS goes along with it.
Letter 3 goes with it as well.... Sucks major!

 

[CaptRob]

Who needs who? Who cares?

They certainly could do that I suppose, but management hasn't floated that idea, but they have floated selling Eagle. Here's a question for you, how "profitable" would Eagle be without AA to feed? I suspect an overwhelming percent of passengers on Eagle connect on to a mainline jet, whereas most AA passengers never step foot on Eagle.

In LAX, at least half of the passengers on Eagle don't set foot on an American Airlines jet. They go to Delta, Continental, Alaska, Hawaiian, Northwest, Qantas, Japan, ATA, or any one of the code-share partners they have in Los Angeles. I imagine that if Eagle were to be sold, they would make many more of these agreements.

Quabbleing over who would be better off is useless. AA/Eagle is a symbiotic relationship. If AMR could make money without the investment it takes to operate Eagle, they would, in a heartbeat.

AMR has shown it's loyalty toward Eagle pilots. It's not an impressive show. When was the last time Arpey mentioned Eagle? When was the last time Arpey spoke to an Eagle union leader?

There's your answer.

 

[tarp]

Well, somebody just nailed one of the reasons. If AMR/Eagle has "flow-through", then don't they have "flow-back"?

They just said they are going to furlough/release 450 AA pilots. Don't AA pilot's have first rights to Eagle slots (by flow-back)?

Just like at Continental - suddenly everybody in your house is in the training department. Huge costs. But if Eagle is gone (sold) before the furloughs, then both companies stay in a status quo with the only losers being the 450 at the end of AA's seniority list.

If I'm management and I see 900 training events. 450 AA guys retrained to Eagle and 450 Eagle CA's probably displaced to FO. I'm thinking at $18-25K per training event, that a lot of money can be saved. 900 x 20K per is $18M just in retraining costs that ain't being covered by excess revenue on seat miles.

US Airways is balking at Seniority (and they want to flush pilots with retiring aircraft). ACA/Indy just "tweaked" their contract to get Indy off the ground without having the entire pilot list in training - lose two aircraft (J41 and DoJet's) and add the Airbus with only the CRJ guys stuck in the middle.

Ladies and gentlemen, training is expensive. The airlines know this. They are trying to get around it anyway they can. Our seniority system creates a lot of training events for every seat move depending on the structure of the company. I've found that THIS is our Achilles Heel. When an airline gets down to line items - fuel, salaries and training events are expensive little tickets.

 

[vc10]

Contribute the equity to its pension plan, thereby reducing the underfunding...

What!!?? Why would AMR sell Eagle? That makes no sense. They have so much invested in them, they provide feeder service from all over to AA's hubs. What a loss that would. I don't get it.

 

[PacoPollo]

amr will "sell" eagle to get rid of the APA's scope. Look for the "new" eagle
operating the emb's170-190. in the near future...

 

[BEXFlyer]

Food for thought.....


I was just looking in the latest issue of "American Way" magazine the other day......NO mention of Eagle at all. No plane specs, no press whatsoever. HMMMMMMMMMMMM

 

[RJET]

The sale of Eagle might be a good thing. Grow as fast we want, fly what we want, no scope clause, besides how worst can it get?

 

[FO 4 Life]

I suspect an overwhelming percent of passengers on Eagle connect on to a mainline jet, whereas most AA passengers never step foot on Eagle.

If they start on Eagle and connect to AA, how do you think they're going to get back home? AA will magically take them home instead of making them step foot on an Eagle airplane.

AA flyer, as far as the 10-K for AA, AMR still moves money around. We pay AMR for everything we use. Gates, simulators, even the friggin ice we get. Don't believe everything you read about money when AMR is involved.

Selling off Eagle won't get around the scope either as long as we provide feed for AA. However, the APA did give away unlimited domestic codeshare in the concessionary agreement so we could buy bigger aircraft and codeshare instead of providing feed.

 

[belchfire]

"If AMR gets rid of Eagle who will mainline provide feeder service for?"
Funny! Anyway, I can't see them selling Eagle. One would assume that it is much more economically viable than mainline given their lower operating cost, and has to add significantly to AMR's bottom line. It would be a massive influx of cash if they were able to find a buyer, but I think it is a short sighted solution that has more down sides in the long term. Thoughts?

Corpex in J-32's baby! We're going to start the revolting retro prop revolution!
hehehe

 

[FDJ2]

If they start on Eagle and connect to AA, how do you think they're going to get back home? AA will magically take them home instead of making them step foot on an Eagle airplane.

And your point is? You've only addressed the minority of passengers flying the AA code who happen to get on an Eagle aircraft, not the majority that don't.

 

[80drvr]

If they start on Eagle and connect to AA, how do you think they're going to get back home? AA will magically take them home instead of making them step foot on an Eagle airplane.

AA flyer, as far as the 10-K for AA, AMR still moves money around. We pay AMR for everything we use. Gates, simulators, even the friggin ice we get. Don't believe everything you read about money when AMR is involved.

Selling off Eagle won't get around the scope either as long as we provide feed for AA. However, the APA did give away unlimited domestic codeshare in the concessionary agreement so we could buy bigger aircraft and codeshare instead of providing feed.

So, are you saying that Arpey is lying on the financials? It's pretty simple-Regional feed generates less revenue than it costs.

Also, APA did not give away "unlimited" domestic codeshare. There are many limitations in the letter of agreement that would preclude what you propose. Plus, it is unlikely that AMR would relinquish control of Eagle in an IPO.

 

[PacoPollo]

Hey FO4Life dealing with this APA pukes is a waste of time. They are the best of the best at everything.

 

[80drvr]

Hey FO4Life dealing with this APA pukes is a waste of time. They are the best of the best at everything.

Thanks for the compliment .

 

[Beerme]

The sale of Eagle might be a good thing. Grow as fast we want, fly what we want, no scope clause, besides how worst can it get?

I don't know...why don't you ask one of the Independence Air guys???

 

[igneousy2]

They certainly could do that I suppose, but management hasn't floated that idea, but they have floated selling Eagle. Here's a question for you, how "profitable" would Eagle be without AA to feed? I suspect an overwhelming percent of passengers on Eagle connect on to a mainline jet, whereas most AA passengers never step foot on Eagle.

The number used to be about 25% of mainline pax came from eagle. I suspect that the number is higher now. Since 9/11 eagle has shrunk its "feeder" capacity and grown in areas that were traditionally mainline domains. BOS-DCA, BOS-JFK, BOS-LGA, were never flown by Eagle but now take up a huge percentage of flight hours. (I'm sure there are others but I was BOS based)

Here's a question for you...How many other airlines would love for Eagle to be able to feed them?

If AMR was willing to spin off their cash cow SABRE, anything is possible. The possible expansion of eagle once APA is out of the picture is tantalizing. Eagle could be way more creative with code-shares, etc. with all the money going into the coffers of AMR.

Flow through agreement ends in a few years anyway. Many questions still remain about what happens to the various groups of pilots once this occurs. Do flowbacks get to stay? The captains with AA numbers, do they still get to go? I'm sure this will all be settled civily in court.

As far as training cycles, the numbers calculated are exagerated because of several factors...

1. Only about 20% of the furloughs actually accept flowback for whatever reason. Some can get more money elsewhere and some simply aren't qualified to be a captain at Eagle (or any other airline).

2. Most displacements of captains are only "paper" displacements with captains immediatelly being awarded vacancies on the same bid. Eagle pilots actully have the power to limit the number of guys coming back by not putting any jet captain slots in their displacement preferences, but Eagle pilots have never been a united bunch.

3. Eagle management controls how many flowbacks come back at a time so they have control over how many training cycles they create.

Training cycles are hardly a reason to sell off Eagle.

Later

 

[amcnd]

Eagle won't be free after a sell. Most likely they will set up somthing like COEX. But alot longer, like a 16 year contract to feed AA.! (sound familiar) A IPO is not a good idea right now for AMR. The "street" is to smart(they know Eagle would still be tied to how AMR is doing) and the industry as a hole is bad. the only solution is to sell to another company and get a low fee for departutre to keep there profit high. Eagle is still number 1 on the profit margin scale. And another company could come in and purge the company of usless jobs, and get a higer profit. Not to many company's have over 1bil. dollors (what Eagle is estimated to be worth) Myabe DR. Evil