CrustyFE

This was received from the Eagle MEC of ALPA:

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American Eagle Airlines
MEC Hotline
03/25/11

This Week’s Topics:

1. Update on Potential Divestiture of American Eagle

This week, the AMR Board of Directors met. One of the topics of discussion was the potential divestiture of American Eagle. Although the Board has yet to authorize the divestiture of American Eagle, we believe they will be in a position to do so shortly. The MEC is now operating with the expectation that a decision to divest could come as early as May.

Therefore, ALPA and company negotiators met this week to continue working on a ‘longevity initiative,’ a comprehensive plan to assist pilots who would like to transition to mainline carriers in doing so. This May, the final group of flow-through pilots who received a ‘make whole’ remedy (i.e., third or fourth year pay step at AA, retroactive B-fund contributions, etc.) will transfer to AA. Seventy-five percent of those who were offered the ‘make whole’ remedy accepted transfer to AA. That has provided for us a recent historical statistic from which to determine the types of elements that may make it possible for high longevity pilots to make the transition given their current life situation.

Once we have finalized a draft ‘longevity initiative,’ and now that our competitors have reported their 2010 financials, we will reevaluate Eagle’s competitive position in anticipation of our April MEC meeting. We are also continuing to move forward on the legal front by challenging AMR’s expressed desire to take ownership of Eagle’s aircraft prior to a divestiture. The MEC will be briefed on all of these subjects at the April meeting.

In addition, management announced today that they have reached an agreement with American Airlines to continue travel benefits for American Eagle employees exactly as they are today for a period of five years beginning at the time of divestiture.

The next all-pilot teleconference will be held on Friday, April 8th, at 1:00 p.m. Central Time. We appreciate all of the pilots who sacrificed their personal time to join last week’s teleconference and will continue to host them on a regular basis until there is some resolution to the question of Eagle’s future ownership structure.

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So if AMR keeps the planes after divestiture, there is no airline left. What would they do with the aircraft? Park them or let other regional airlines fly them? Five years of travel sounds like a severance package.

As far as i know it would be a precedent to shutdown an entire major airline without a bankruptcy or any other financial distress.

It would also leave a huge gap in AMR capacity.


I'd love to hear reason why liquidation might not happen.

Diver Driver

I wouldn't be so sure that it would result in a liquidation. Perhaps a sale of the company and lease agreement between AMR and the 'sold' Eagle would be the most likely scenario. Many Major airlines lease aircraft to regional carriers that provide feed for them.

Companies divest (sell) businesses they own all the time, most of the time, it doesn't mean the assets will be liquidated.

Addressing the flight bennies, maybe if Eagle gets sold and planes leased back, you guys will have your AMR bennies for 5 years until something else is negotiated?... Although, when I was furloughed, I got to keep my DL bennies for 5 years. Hard to say what could happen.

CrustyFE

Well American Eagle has been up for sale for a few years now. No one has bought us yet. Rumor has it that we're too big to be bought. The annual salaries to our pilots are $100 million higher than the next closest regional. That was before a lot of our senior pilots started flowing to AA though.

Another rumor is that Virgin American wanted to buy us but AMR didn't want them to have it.

Seems like AMR is dead set on getting rid of Eagle so they can get less expensive regional flying no matter what it cost them initially.

Also, all the ERJ's are coming up to the end of their second service life extension. Would it make sense to extend the service life again? I don't think so.

Imapilot2

Actually Mesa looks to be a possible investor now.

P56C

Go on please. We are listening.

clearprop

Yea, and a monkey just flew out of my arse

ERJF15

What kind of monkey?

NoBeta

The kind in my avatar ........

I'd settle for one that throws feces at TSA ....

Sorry for the thread hijack..... I saw an opening...... carry on Fellers

CrustyFE

I created this thread as "The Possible Liquidation of American Eagle." Not "The possible Sale/Divestiture of American Eagle.

There is very little chance for a sale and a divestiture is almost certain. In any case, that was not the subject.

The subject is the possible LIQUIDATION of Eagle based on the letter from the Eagle MEC of ALPA.

Phuz

title should read "The Absolutely Certain Sale/Divest of American Eagle"

as to the aircraft being at AMR and the list being at Eagle - look no further than July 1, 2010 - DAL has the same arrangement with CPZ