Executive to be sold (back) to founder Joaquin Bolivar

[Oliver Stone''s Apprentice]

American Eagle Announces Sale of Executive Airlines
Wednesday November 6, 8:03 am ET
FORT WORTH, Texas, Nov. 6 /PRNewswire-FirstCall/ -- American Eagle Airlines today announced that it has signed a letter of intent to proceed with the sale of Executive Airlines. Executive currently operates as American Eagle out of its hubs in Miami and San Juan, providing service to destinations throughout Florida, the Caribbean and the Bahamas. The sale is expected to close near the end of first quarter 2003.

American Eagle is taking this step to ensure that American Airlines stays in compliance with its contract with the Allied Pilots Association (APA). That contract limits the amount of flying which can be done on the American code.
Although I am disappointed that we have had to take this step, this transaction achieves a number of objectives, said Peter M. Bowler, President of American Eagle. First, it keeps American in compliance with the ''scope clause'' imposed in the contract between American and APA. Second, it preserves jobs at both Executive and Eagle by avoiding the necessity of grounding additional aircraft, which would have been the alternative to the sale. And finally, the sale will provide American with valuable and profitable feed traffic.
Eagle has entered the agreement with Joaquin Bolivar, a Puerto Rican businessperson and Chairman and CEO of the Water Club Hotel and the Excelsior Hotel, both in San Juan. Mr. Bolivar also founded Executive Air Charter in 1979, and owned Puerto Rico''s largest chain of travel agencies, Bithorn Travel, from 1990 to 1999.
The transaction will include a marketing partnership under which Executive will continue to provide feed traffic to American -- but using its own designator code, rather than American''s -- to and from San Juan and the American Airlines hub in Miami. Its operations will use the AmericanConnection(SM) service mark, a service mark licensed by American to independent regionals that provide American with feed. Financial details regarding the sale were not released.
An ongoing relationship with Executive was very important in evaluating the sale, commented Bowler. Executive really has an outstanding group of employees. They''ve done a terrific job of providing safe and reliable service to Eagle customers in Florida, the Bahamas and the Caribbean.
While we''re sorry that we have to take this step, we are pleased to be able to sell this airline to the man who founded it over 20 years ago, concluded Bowler.
Gary Ellmer, Executive Airline''s current president, will remain at Executive after the sale. Ellmer joined American Eagle in 1999 as regional vice president of its Northeast region, after Eagle acquired Business Express Airlines, where Ellmer served as president and chief operating officer.
Executive began scheduled air service in the Caribbean in 1985, taking over routes from Prinnair after that regional airline went out of business. In September 1986, Executive was awarded an American Eagle franchise service agreement, and the regional carrier began coordinating its flights to enable its passengers to connect with American Airlines flights into and out of San Juan. In December 1989, AMR Eagle Inc. purchased the stock of Executive Airlines. Today, Executive flies as American Eagle in Florida, the Bahamas and the Caribbean, but the airline manages its own operation, closely coordinating scheduling and other functions with American Eagle and American Airlines.
American Eagle currently offers more than 1,400 daily flights to more than 130 cities throughout the United States, Canada, the Bahamas, Mexico and the Caribbean. American Airlines is the world''s largest carrier. American, in concert with American Eagle and the AmericanConnection regional carriers, makes up the American Airlines network. Together, they serve more than 250 cities in 41 countries and territories with approximately 4,400 daily flights. The combined network fleet numbers more than 1,100 aircraft. Only American provides More Room Throughout Coach for More Coach Passengers. American Airlines is a founding member of the oneworld alliance.
Current AMR Corp. (NYSE: AMR - News) news releases can be accessed via the Internet.
The address is http://www.amrcorp.com .

 

[BillLumbergh]

[BLOCKQUOTE][BR]----------------[BR][STRONG]On 11/6/2002 12:51:26 PM Skyhungry wrote:[/STRONG]
[P]Looks like the rumors are true.[BR][BR]Miami Herald 11/6/02[BR][BR]AMR to unload operator of American Eagle[BR]BY INA PAIVA CORDLE[BR][email protected][BR][BR][BR][BR][BR][BR][BR]COST-CUTTING MOVE: The sale of Executive Airlines may be a precursor to the disposal of American Eagle, an affiliate of American Airlines. [BR][BR]AMR Corp., urgently trying to stem losses and bring in cash, is expected to announce today the spinoff of Executive Airlines, the operator of Miami and San Juan flights for American Eagle.[BR][BR]The sale may be a precursor to the disposal of the remaining operations of American Eagle, a regional carrier that is an affiliate of American Airlines.[BR][BR]An American Eagle spokeswoman would not confirm the spinoff Tuesday, but said it is something the airline has thought about for some time.[BR][BR]''When we have details, we'll go public,'' said spokeswoman Lisa Bailey.[BR][BR]Three sources close to American Eagle say a deal is almost certain to be announced this morning and could be completed by the end of the year.[BR][BR]American Eagle has shrunk its operations in Miami since Sept. 11, 2001, and now ranks as the fourth-largest carrier at Miami International Airport. Year-to-date, American Eagle has flown 880,936 passengers through MIA, representing 3.9 percent of the airport's passenger volume, said airport spokeswoman Inson Kim.[BR][BR]The regional carrier began flying out of Miami in 1991 with 12 19-passenger Jetstreams. It now flies at least 50 daily flights aboard 46- and 64-seat turboprops.[BR][BR]In Miami, the airline employs at least 270.[BR][BR]AMR has announced it would slash 7,000 jobs by March, while it cuts capacity and costs, parks planes and delays aircraft deliveries. Unable to push leisure fares higher, the company is combating the decline in domestic business travel, lower Latin American traffic and a surge in low-cost competition in San Juan.[BR][BR]When AMR announced a staggering $924 million third-quarter loss last month, Chief Financial Officer Jeff Campbell told analysts the company would consider selling noncore assets, such as American Eagle.[BR][BR]''Chairman [DON]Carty has said that everything is on the table,'' Bailey said. ``We're looking at all sorts of options. Nothing is being ruled out.''[BR][BR]AMR paved the way for the sale of Executive on Oct. 1, transferring all of the turboprop aircraft flown out of Miami to Executive Airlines' Federal Aviation Administration operating certificate. Miami region employees were also transferred to Executive last month.[BR][BR]Previously, Executive encompassed only the San Juan flights and employees.[BR][BR]Rumors have swirled for months regarding potential buyers for Executive. They include Chatauqua Airlines, a regional carrier that provides service for American Connection; Caribbean Star Airlines, a small Antiguan carrier that expressed interest in the past; or the previous, San Juan-based owner of Executive, which sold the carrier to AMR.[BR][BR]AMR could also take Executive Airlines public in an initial offering or sell the operation to a group of investors and managers.[BR][BR]''All the majors are considering what they have that they can sell that can create liquidity and allow them to focus back on core operations,'' said Coral Gables aviation consultant Stuart Klaskin, partner in Klaskin, Kushner & Co. ``And these sorts of sales are a classic example of both.''[BR][BR]Depending on the buyer, the Executive sale may be largely transparent to South Florida passengers, Klaskin said. However, it would mean that American Eagle's regional jets would not be placed here.[BR][BR]Pilot members of the Air Line Pilots Association say they oppose the sale.[BR][BR]''The sale of Executive would break the basic promise that American Eagle made to its pilots in 1997, when they agreed to combine all the carriers that make up American Eagle into one airline,'' said James Magee, spokesman for the American Eagle unit of the Air Line Pilots Association. The airline has 152 pilots in Miami and 260 in San Juan, said Ron Lovas, a spokesman for ALPA.[BR][BR]Flight attendants and pilots also say they are concerned that a buyer might not have an interline agreement with American, which would affect the flying benefits that they enjoy today. The airline has about 125 flight attendants in Miami and 120 in San Juan, said Patricia Hoefener, former president for the American Eagle unit of the Association of Flight Attendants.[BR][BR]American Eagle started service in 1984, with two carriers serving eight cities from Dallas/Fort Worth. Over the next several years, three other airlines were added, and two of the five merged.[BR][BR]In 1997, the four surviving carriers -- Executive, Simmons, Flagship and Command -- were combined into American Eagle. However, Executive, because it was based in San Juan, retained its separate operating certificate.[BR][BR]From Miami, American Eagle's destinations include Freeport, Nassau, George Town and Marsh Harbour, Bahamas, and Fort Myers, Jacksonville and Key West.[BR][BR]

 

[BillLumbergh]

I've combined all threads and referenced them here for replys.

 

[capeman]

It is just a matter of months from now, that the next announcement will be; Executive to order 70 and 90 seat jets. American Connection surpasses AE in loads. The alter ego carrier is alive and well.

 

[capeman]

[P class=MsoNormal][BR][BR][BR][BR][BR]
[P class=MsoNormal]It is amazing to see the TWU and APFA members on this board arguing over seniority numbers that will have no relevance a few years from now. Cant one see what will be happening to the domestic operation of AA? American Connection will fly it, and all your *****ing now will not change a thing. Be grateful of what you have now. Look way ahead what is down the road. This is just the start with Eagle. AMR is coming after you next with some other alter ego carrier, and your seniority number today will be worthless tomorrow. [BR][BR][BR][BR]
[P class=MsoNormal]You should all be working together today so that there will be a future in the morning. This TWA LLC thing is just a side track while AMR comes around to your 6 and takes it. If you don't stand up now, come back to this thread 10 years from now and see what you think. This is just the start![/P]

 

[Oliver Stone''s Apprentice]

Let's see. Can someone remind me which one of the following alter-ego carriers was owned by AMR?....

1. Metrojet
2. Delta Express
3. Shuttle by United
4. Continental Lite

If AMR didn't start up an alter-ego when they were the rage in the 90's, or use TWA-LLC to do it, why do you think they'd start one now?...

 

[AC AA LA FA]

Can you say Scope? The Scope clause never really affected AMR until the last couple of years. RJ's were the only issue of the 90's. Now we have ASM's, Fleet size, and regionals of other carriers growing like weeds taking flying from the mainlines. Can you think of a better time to start?



..All bets are off nowdays, it seems a matter of survival..I wondered before if this would be the time for AA and the unions to come together for an idea that might lead to a low cost unit...something that will save jobs at AA, make money, and improve quality of work life..there has to be a middle ground to all this Scope..that will work for all..I hope great minds together can forge new ground in this area instead of two bit ideas and reactionary measures to stem losses and keep shrinking.........

 

[AC AA LA FA]

I heard the figure of$700 million?..not sure ASM..

 

[capeman]

Can you say Scope? The Scope clause never really affected AMR until the last couple of years. RJ's were the only issue of the 90's. Now we have ASM's, Fleet size, and regionals of other carriers growing like weeds taking flying from the mainlines. Can you think of a better time to start?

 

[G4G5]

[P]How much did AMR get for Executive $$ ?[/P]
[P]How many ASM's are removed from Eagle (Scope)?[/P]

 

[tadjr]

Does anyone know if the sale includes an AA only clause or is Executive free to set up code shares with anyone else?

 

[Oliver Stone''s Apprentice]

If anything, any exclusivity clause would probably be for AA to commit to codesharing on NA, and not the other way around, similar to how Express Jet was spun off from Continental.

 

[tadjr]

I was curious because this could be interesting in SJU with US announcing they were interested in increasing their Caribbean presence and having to hook up with Winair, Caribbean Star and Nevis Express. If Executive is now free to code share with someone else, this could open up a whole new set of destinations for US and could (in the distant future) allow for increased San Juan- US Mainland flights overflying the hubs. If anyone has any more definite info it would be appreciated.

 

[G4G5]

[P]
[BLOCKQUOTE][BR]----------------[BR]On 11/7/2002 1:02:53 AM eolesen wrote:
[P]If anything, any exclusivity clause would probably be for AA to commit to codesharing on NA, and not the other way around, similar to how Express Jet was spun off from Continental.[/P]----------------[/BLOCKQUOTE]
[P]If this is the case then it won't help AMR's case with the APA's arbitration hearing. If their is an exclusivity clause associated with the sale then AMR mgt will have to prove that something has changed. When in fact nothing has changed, executive has always had it's own operating certificate. This may prove to be a major blunder if AMR mgt looses the APA or Eagle pilots Scope arbitration cases. [/P]
[P]Then they will have divested Executive for nothing..........[/P]
[P]Wouldn't it have made more sence to sit down with the APA, 463 days with out a contract and counting. Don, It's not going away just because you sold Executive, all you are doing is adding fuel to a fire.[/P]

 

[blockquote]
----------------
On 11/7/2002 840 AM G4G5 wrote:



[BLOCKQUOTE]
----------------
On 11/7/2002 1:02:53 AM eolesen wrote:


If anything, any exclusivity clause would probably be for AA to commit to codesharing on NA, and not the other way around, similar to how Express Jet was spun off from Continental.[/P]----------------[/BLOCKQUOTE]


If this is the case then it won't help AMR's case with the APA's arbitration hearing. If their is an "exclusivity clause" associated with the sale then AMR mgt will have to prove that something has changed. When in fact nothing has changed, executive has always had it's own operating certificate. This may prove to be a major blunder if AMR mgt looses the APA or Eagle pilots Scope arbitration cases. [/P]


Then they will have divested Executive for nothing..........[/P]

A note to the APA. get rid of the scope clause or AA will probably sell of Eagle bit by bit just to add RJS.


Wouldn't it have made more sence to sit down with the APA, 463 days with out a contract and counting. Don, It's not going away just because you sold Executive, all you are doing is adding fuel to a fire.[/P]
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[/blockquote]