SEC Form 10 filing to be submitted today. Details include:
* Eagle generated $1.2B in 2010 revenue, including $250M from ground handling
* Eagle would operate 281 aircraft for AMR under a 9-year capacity purchase agreement
* AMR would competitively re-bid up to 12 prop aircraft beginning in 2012, and up to 40 jets beginning in 2014
* Agreement provides for rate re-set after four years to account for any market changes
* Under an additional 8-year agreement, Eagle would provide ground handling for AMR at 106 airports
* AMR would have the right to competitively re-bid a specified number of ground handled stations each year
* All of Eagle's jets (and the associated debt) would pass to AMR ownership before the spin-off
* Spin-off does not require AMR shareholder approval
Thanks for copying my notes!
No word as to what kind of soap and shampoo Garton prefers for his late night fountain baths, I see ...
That's funny - I always had heard it was a house party in Miami, not a fountain. Hmmm ...
Maybe, but that number still seems really high. Last time I looked, there were only about 20-25 stations outsourced below the wing, and there are only another 20 between 8 and 15 departures. That's a total of about 40-45 stations total, nowhere near 106.
http://airlineforums.com/index.php?showtopic=50568&view=findpost&p=791095
I took that to mean that basically Eagle will perform ground handling at 106 airports under the 'American' brand - either ground-handling AA itself, or ground-handling Eagle's own 'American Eagle'-branded operations. I think (though could be wrong) that is how they got to that 106 number.
Management Reiterates Proposal for Commuter Air Carrier Scope Relief
Last week, APA's Negotiating Update relayed management's desire for continued scope relief with their commuter carrier operations. The negotiating update disclosed that management reiterated their long-standing proposal of increasing the passenger seat limit on jets flown by commuter carriers like Eagle. Management proposed that commuter carriers be allowed to fly up to 76-seat jet aircraft. Not only is this proposed increase in seat count important but so is the accompanying increase in maximum takeoff weight (MTOW) of these aircraft. To date, management is proposing to increase the current MTOW of 64,500 pounds* up to a MTOW of 89,000 pounds.
This increase in passenger seat count and MTOW would allow for an increase in CRJ-700 series aircraft count and open the doors to current aircraft like the CRJ-900 and Embraer 170 series aircraft (pictured below).
The APA Negotiating Update characterized the discussions as "tense and occasionally heated," noting that "negotiations on Section One (Scope) of our contract will likely be the most contentious aspect of this negotiation." This is to be expected when you consider that since 2003, AA mainline domestic block hours flown have decreased 28 percent while Eagle's domestic block hours flown have increased 30 percent.
*MTOW does not include the CRJ-700 exception granted in Dec 2003, Letter of Agreement SS.
I thought Crandall's vision of A/A doing transcon and international and Eagle (and the other regional affiliates) doing domestic was dead.
Maybe not.
Like so many things - unfortunately - between AA and its unions, this is the definition of moral hazard. When your two largest competitor pilot groups have both agreed - or had forced upon them - a substantial relaxation of SCOPE, AA is now at a competitive disadvantage with its current SCOPE clause. Look at the Delta and United systems - and look at how much of their system ASMs are generated by their regional operators - in both cases, I believe it is more than double the percentage as what Eagle/Connection operate for AA. This is critical, of course, since AA is increasingly finding itself competing not against United or Delta, but against the United- or Delta-branded RJs being flown by SkyWest, Shuttle America, etc. (ORD-LGA being the classic example).
As I've said numerous times here and elsewhere, I don't think even the most militant, anti-company, Arpey-hating unionist here would dispute that, all else being equal, AA mainline costs, in a variety of areas, will never be as low as SkyWest or Aeroman. As such, again - it is the classic example of moral hazard: Delta and United (and other airlines, of course) have derived huge savings from outsourcing more and more of their flying to regional operators, outsourcing overhauls to El Salvador/China/Korea, etc., and thus AA - which hasn't done those things, or not done them to the same extent - is now at a competitive disadvantage.
Unfortunate, but reality.
