Eagle furloughs?

[Erlanger]

May 21, 2008

Eagle and Executive Employees,

At today’s annual stockholder’s meeting, AMR announced its decision to make even deeper capacity cuts for the fourth quarter of this year than previously announced. The rapid growth in jet fuel prices, combined with the weakening economy, has created very difficult conditions for airlines in the United States .

The fuel price impact from January to March was up more than $660 million dollars for AMR compared to prices paid during the same period last year. As we all know, prices for jet fuel – as well as for gasoline – have increased even further in April and May. Although AA has raised prices several times and increased various customer fees, total revenues have not kept pace with expenses. AMR’s loss of $328 million during the first quarter was alarming and the continued increase in fuel prices and signs of economic softness are further cause for concern.

Under these conditions, many of AA’s and Eagle’s routes do not generate enough revenue to pay for variable expenses such as fuel, landing fees, taxes and the salaries of our crews and other operational personnel. As a result of these facts, and to ensure that AMR has enough financial resources to weather this storm, it has decided to reduce its system-wide capacity.

While AA has not made final decisions on the specific schedule changes, it expects to cut 11 percent to 12 percent of fourth quarter domestic mainline capacity from 2007 levels and has directed Eagle to reduce our schedule by approximately the same percent. As a result of these reductions, American plans to retire 40 to 45 mainline aircraft and the regional network will be reduced by 35 to 40 regional jets, as well as some number of turbo-props.

Unfortunately these capacity reductions will result in layoffs at both American and American Eagle – and could result in facility closures or consolidations. As we get a better understanding of the new schedules and carefully evaluate our staffing requirements by work group and by location over the coming weeks, we will communicate specific changes as quickly as we can.

I am grateful for the excellent work Eagle’s people do. You are making a difference every day by ensuring that every trip and every job is performed safely, by caring for our customers and finding ways to complete our work efficiently under challenging conditions. I am confident that we will adapt to the changes announced today as well as to the outcome of the ongoing divestiture process and that Eagle will be one of the world’s safest, most reliable and successful regional airlines. Thank you for all your efforts.

Sincerely,

Peter Bowler

President and CEO

 

[CX880]

Translation, Bla bla bla, you're all furloughed have a nice life. 40-45 aircraft? Good luck guys, I gues we're all going to need some.

 

[taysha]

May 22, 2008

Fellow Eagle ALPA pilots:
Capt. Jim Winkley briefed the Negotiating Committee on Wednesday’s announcement by Gerard Arpey that AMR capacity will be reduced by approximately 11 to 12 percent. With his permission, I am sharing his comments with you, in order to help answer the many questions that will come from this news.
Due to the increase in fuel costs and the softening economy, American Airlines will be parking 40 jets, most likely MD80’s and perhaps A300’s. AA will be considering each and every route on an individual basis in order to maximize profitability. Capacity reduction decisions will then be made on that analysis.
Similarly, American Eagle and American Connection will be parking between 35 to 40 regional jets, and an unknown amount of turboprops. Again, each route will be considered on an individual basis in order to determine where capacity will be reduced.
The capacity reduction is scheduled to begin in September of this year, but it is expected that the results of the analysis may not be known for several weeks. More detail will be shared when these decisions have been made. American Eagle, of course, will not know exactly where our reductions will be made until AA decides where their reductions will be made.
Due to these events, new hire classes are cancelled indefinitely. It is hoped that the pilots currently in training will bring our staffing to a manageable level, to balance the summer flying schedule against the planned reductions in September. While every effort will be made to mitigate the effect on the Eagle pilot group, displacements and furloughs will almost be a certainty.
While it is too early to make decisions about the turboprops, management is considering how to balance the efficiency of the Saabs and the ATRs against the inefficiencies of maintaining a smaller fleet. The Saabs, for example, are approaching their twentieth year in service, which triggers additional FAA required maintenance.
Captain Winkley reiterated how important these announcements are to Eagle pilots. However, it will be several weeks before any further decisions are made.

Capt.
MEC Communications Chairman