AMR to say "Buh Bye" to Eagle?

[I.P. Freley]

After Continental's success related to its SPIN-OFF (sell shares to the public - not an acquisition by another company) of Coex, I think a number of majors are considering that option. Continental made a nice profit from the Coex sale and yet it retains the full benefits it enjoyed while it owned Coex.

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....

 

[FDJ2]

Spinning off Eagle and losing Eagle feed are not one in the same. AMR can spin off Eagle in a public offering to raise $$$ and still retain Eagle small jet lift. CAL successfully did it with CoEx, it is not beyond the realm of possibilities to see other airlines do the same thing with their regional affiliates.

 

[Propsync]

No kidding CRJ. UAir is about eight years late on the small jet brigade. I wonder if they would be in better shape now if they had bought their own RJ's when everyone else was. Although, I wonder how well all of the WO's are doing right now money wise. Shrinking prop fleet, lots of training, CH. 11, no more deliveries for the plan that was sure to save it all. My buddy left a couple of years ago. He said it was a real mess when he left. I can only imagine.


Sorry guys! I didn't try to hijack this thread. Back to business..

 

[PacoPollo]

They will sell us to **CENSORED****CENSORED****CENSORED****CENSORED**akua merging us into their list(DOH) displacing all of their CA so that finally 10year AE FO's can upgrade!!

 

[Saluki Dawg]

If this sale works the same way as when CAL sold off Express, then I think that they will sell off Eagle. CAL simply sold shares of CALEX on the NYSE and called the new company ExpressJet Holdings. They then negotiated a Capacity Purchase Agreement between CAL and ExpressJet. This kept ExpressJet as the exclusive provider of feed for CAL out of their current hubs until January 1, 2007. ExpressJet also pays CAL back all of their suppossed debt associated with RJ leases, Hangers, our Training Center, and other debt obligations. We are paid on a fee per departure arrangement, and refund any money over our guaranteed margin of 10% back to CAL.


This is also the arangement that NWA used when it sold off Express Airlines1. This arangement has proven time and time again to be very lucrative to the mainline carriers bottom line, so I think not only will Eagle be operated like this in the near future, but ASA and Comair as well.

 

[JumpJetter]

Everyone always bashes the Boyd Group, but didn't he call some of this (IF it happens..)
---------------------------------------
http://www.aviationplanning.com/DenverConference/conf2004fin.htm

"Small Jet Providers. Here's a forecast point missed by other conferences, and one that's miles over the head of the FAA: there is no longer a "regional airline" industry. It's gone. These operators are now SJP's - small jet providers. Today, with a few exceptions, such as EAS markets, operators such as Mesaba, Mesa, and Skywest don't have their own route systems. That's because they're not in the airline business anymore. They are in the far more demanding role of selling lift to mega-carriers - specifically, they provide small jet lift (and for the moment, some turboprop lift) to mega-carriers, operated at the direction of each mega-carrier buying the lift. The enormous ramifications of this - including the future spin-offs of SJPs now owned by mega-carriers - were covered at the conference. "

"Excess Capacity - "Regional" Jets.
Not To Mention the SJPs That Operate Them

The poorly-researched media stories on the "growth of regional jets" notwithstanding, the fact is that even today there is hardly a shortage of small jets. Along the lines of the Atlantic Coast Airlines situation, it's becoming clear that there is an emerging excess of both small jet providers and the small jets they operate. (We recognize this runs counter to the herd thinking, but that's why our conference attendees run ahead of the herd.)

As our fleet forecasts have indicated (and expressed at our conferences) for the past three years, the "RJ" demand curve would peter out in the early part of the decade, and the applications of small jets would begin to decline in the 2005 - 2007 time frame. That's what's already taking place, and, give or take a spike or two, that trend will become more pronounced in the next five years.

The ACA/United relationship is only one indication. The reduction in American operations at STL is also pointing toward some small jets looking for a home. And, interestingly, almost on cue two days after the conference, Northwest was reported to have reduced the number of jets it allows Mesaba to operate, and may entirely cancel that SJP's contract to operate jets for Northwest.

Going forward, plan on a shake-out in SJPs. The ones which can provide excellence in service at the lowest cost will survive. Those that can't will end up with fleets of RJs sitting expensively idle."

 

[jetexas]

I have always thought the term "regional jet" was ironic. It was the "regional jet" that launched the regionals into distant, non-regional markets. What 'region' is it if you fly DFW-GRR, DFW-GSO, IAH-ORF, etc etc?
SJP is a much better term but that is one step toward recognition and better treatment.

 

[601Pilot]

Spinning off Eagle and losing Eagle feed are not one in the same. AMR can spin off Eagle in a public offering to raise $$$ and still retain Eagle small jet lift. CAL successfully did it with CoEx, it is not beyond the realm of possibilities to see other airlines do the same thing with their regional affiliates.

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

 

[Publishers]

It is a symbiotic relationship with contribution margins that effect both companies.

It is however why I said during the sale potential of Executive Airlines that you would never see any merger of lists, etc. for Eagle. It is separate so it can be disposed of.

 

[AAflyer]

You really need to look at the 10-K, and then tell me who is draining who?

But I guess you will tell me next that those numbers are lies?

The problem here is you repeat things to many times you believe them.


Can't speak for Comair or ASA, but Eagle cost AMR money last year and this year.

While you submit your "are lower costs" speach, what are actually speaking of?

The CASMs of the RJ? or Eagle pilot costs? or Eagle as a labor group costs?, or the BILLIONS that AMR is paying for your jets.

You are right, let's spin AA off, and we can keep feeding you!

AA

Arpey does mention what a great money maker it is, but I guess if you are trying to dress up a pig anything goes.