Firming CRJ-700 options

[HighFlyerMiami]

From http://runwaygirl.blogspot.com/


Wednesday, 21 November 2007

It seems there is some confusion over at American Airlines and its regional sister American Eagle Airlines over whether management has the right to exercise options for 25 more Bombardier CRJ700 regional jets.

A tentative agreement (TA) covering seniority protection for American's pilots and career progression for Eagle's pilots has fallen apart after managment attempted to insert lanaguge into the pact that would establish rights to purchase the 25 70-seaters, according to the Allied Pilots Association (APA), which represents the mainline pilots.

The APA claims management has been unable to document rights to purchase these aircraft under the pilots’ existing contract, and that its language add-on demonstrates managment's "underhandedness".

American Eagle began operating the CRJ700 in January 2002 (photo from AA.com)

There IS language covering the CRJ700 purchase in a 2003 agreement between American and the APA. See for yourself if the pact covers a firming of those 25 options now.

Here’s the “Letter Agreement on CRJ700 Aircraftâ€￾ in its entirety:

This Agreement is made and entered into in accordance with the provisions of the Railway Labor Act, as amended, by and between American Airlines, Inc., hereinafter known as the "Company" and the Air Line Pilots in the service of the Company as represented by the Allied Pilots Association, hereinafter known as the APA.

Whereas the APA and the Company have agreed that in the future, Commuter Air Carriers operating under Section 1.D. of the Agreement shall utilize only aircraft that are not certificated in the United States or Europe with a maximum passenger capacity of more than 50 seats and that are not certificated in any country with a maximum gross takeoff weight of more than 64,500 pounds;

Whereas American Eagle Airlines currently has twenty five CRJ700 aircraft in service or on firm order, and also has options on an additional twenty five CRJ700
aircraft:

Now, therefore, the parties hereby agree to the following:

1. The Company and APA shall have one year from May 2003 to meet and negotiate in good faith the transfer of the CRJ700 aircraft currently in service, on order, or on option at American Eagle to the Company's operating certificate in a manner that shall be cost-neutral as to labor costs under collective bargaining agreements.

2. The APA hereby grants to the Company an exception from the 50 seat and 64,500 pound limitations on aircraft at American Eagle for the CRJ700 aircraft during the time period of negotiations pursuant to paragraph 1, above, and for one year after reaching agreement with the APA under paragraph 1, above, in order to effect the transfer to the Company's operating certificate of all CRJ700 aircraft operated by the Company or an Affiliate.

3. If the parties do not reach agreement under paragraph I of this agreement, the APA grants to the Company an exception from the 50 seat and 64,500 pound limitations on aircraft at American Eagle specifically for the CRJ700s currently in use, on order or on option as of the signing of this letter. This exception is for a maximum of fifty (50) CRJ700 aircraft with the understanding that the cancellation, transfer or expiration of any of the current (as of DOS) orders or options reduces this maximum number by a like amount.

For the American Airlines, Inc.
signed/ Mark L. Burdette
Director, Employee Relations

For the APA
signed/ Captain John E. Darrah
President, Allied Pilots Association

 

[NewHampshire Black Bears]

Hopefully APA will prevail,...So......it "could" force AA to purchase the much needed small jet(s), the E70/E75/E90/E95's., with the flying of them, going to APA, BUT, finally giving A/E pilots a legit' Flow thru agreement !

AA/APA need to STOP this BS with A/E.
Eagle IS one of AA's most valuable assets !!

I would think APA(Once every furloughed AA pilots has been recalled) should offer A/E + AA a proposal that A/E pilots be given a genuine flow thru agreement, as long as A/E pilots join APA.

After that is achieved, designate APA to fly all CRJ-70's, any potential E70(s) etc., and negotiate a lower $$Rate for these birds.

It make ZERO sense to NOT utilize EAGLE to it's FULLEST potential !!

WAKE UP.........EVERYONE concerned !!!!!!!!!!!!!!!!!!!!!!!

 

[HighFlyerMiami]

That makes sense. And it appears to be working for Air Canada.

 

[BoeingBoy]

I hate to say it, but IF these are the same 25 options mentioned in the last "Whereas" ("and also has options on an additional twenty five CRJ700 aircraft") and if they will not result in over 50 CRJ-700's in the Eagle fleet, it looks like #3 covers them:

3. If the parties do not reach agreement under paragraph I of this agreement, the APA grants to the Company an exception from the 50 seat and 64,500 pound limitations on aircraft at American Eagle specifically for the CRJ700s currently in use, on order or on option as of the signing of this letter. This exception is for a maximum of fifty (50) CRJ700 aircraft with the understanding that the cancellation, transfer or expiration of any of the current (as of DOS) orders or options reduces this maximum number by a like amount.

Jim

 

[AA80Driver]

I hate to say it, but IF these are the same 25 options mentioned in the last "Whereas" ("and also has options on an additional twenty five CRJ700 aircraft") and if they will not result in over 50 CRJ-700's in the Eagle fleet, it looks like #3 covers them:

3. If the parties do not reach agreement under paragraph I of this agreement, the APA grants to the Company an exception from the 50 seat and 64,500 pound limitations on aircraft at American Eagle specifically for the CRJ700s currently in use, on order or on option as of the signing of this letter. This exception is for a maximum of fifty (50) CRJ700 aircraft with the understanding that the cancellation, transfer or expiration of any of the current (as of DOS) orders or options reduces this maximum number by a like amount.

Jim

I think the underlined test in the agreement is the crux of the current issue. Why would AMR be trying to slide similar language into an unrelated TA if they clearly had the right to purchase them under this existing agreement?

 

[BoeingBoy]

Yeah, that's why I stuck the two "if's" in there - don't have any idea whether these contested options fit within the language or not. If they're not the same options mentioned in the "Whereas", they're outside the scope of #3. If any of the "Whereas" orders/options expired or were canceled, they're outside the scope of #3. If they would bring the number of CRJ-700's to over 50, they're outside the scope of #3.

All questions I can't answer.

Jim

 

[will fix for food]

I say cancel the options. Get rid of the current CRJ's. Get rid of the 135's and 140's. Pick up some more 145's. Get a bunch of 170's and 190's. Fly the 170's at Eagle and the 190's at A/A. Implement a true flow through-flow back policy. The commonality between the 170's and 190's would minimize the training required in case of a flow situation. Eagle pilots would get some advancement, A/A pilots would have a furlough safety net, and the Company would be able to get some fleet efficiency. Win-win-win.

 

[AirwAr]

First - Eagle purchases all American Connection carriers, bringing all regional flying back to Eagle, the way it should be.

Second –APA pilots take over all flying of the 70 and 100 seaters but allow AA to place these aircraft at Eagle. The APA would agree to operate the 100 seat aircraft at a rate/work rules that is somewhere near that of Southwest, Jetblue, etc. At the same time, AA management would agree to pay rates/work rules for the 70 seaters that are somewhat higher than par as compared to Comair, ASA, etc.

Third – Some type of aircraft purchase ratio should be set. I have no idea what the ratio should be, but it should be set at a level that encourages growth. As an example: For every two 50-seat RJs purchased, there must be at least one 70-seat RJ purchased. For every two 100-seat aircraft purchased, there must be one 737 or greater sized aircraft purchased for AA.

Fourth – All parties agree to a Flow thru/Blowback provision that will move pilots from Eagle to AA. Of course in a downturn, the blowback provision kicks in and the newest Eagle pilots hired will be the first ones furloughed, the old accounting principle, LIFO.

An added bonus for mainline pilots in the above scenario, is that as other regional carrier pilot groups raise their rates on the 70 seat aircraft, the cost advantages between mainline & regional begin to blur.

 

[FWAAA]

Last month, a low-post count poster on Flyertalk asserted that Eagle was going to exercise the options on the 25 CRJ700s; many were skeptical. I can't tell from the quoted material above whether or not AMR has the right to fly the additional 25 at Eagle.

 

[NewHampshire Black Bears]

Last month, a low-post count poster on Flyertalk asserted that Eagle was going to exercise the options on the 25 CRJ700s; many were skeptical. I can't tell from the quoted material above whether or not AMR has the right to fly the additional 25 at Eagle.

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WOW, ANOTHER potential CONFRONTATION between APA/AA(Who would have ever thought) :angry:

With SO MANY contentious "items" between AA/the unions-employees, This is one area where in a short period of time, GREAT long term progress "could" be made between the affected parties.

Meaning;

A/E is AMR's most valuable Weapon(IMHO) as it pertains to AA, Meaning(further) that all concerned could create a POWERHOUSE regional airline, that could be used to "mix and Match Flights as the different times of year/business overall ebb and flow.

Imagine an A/E that had a new fleet of E70-E90's, the ability to challenge the competitors on certain routes at a cost savings................................Hel* the list goes on and on !!

So to AMR/AA/A-E/APA etc, I say............."Quit DICKING around and launch this lethal Puppy..YESTERDAY !!!!!!!!!!!!

 

[formeraa]

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

WOW, ANOTHER potential CONFRONTATION between APA/AA(Who would have ever thought) :angry:

With SO MANY contentious "items" between AA/the unions-employees, This is one area where in a short period of time, GREAT long term progress "could" be made between the affected parties.

Meaning;

A/E is AMR's most valuable Weapon(IMHO) as it pertains to AA, Meaning(further) that all concerned could create a POWERHOUSE regional airline, that could be used to "mix and Match Flights as the different times of year/business overall ebb and flow.

Imagine an A/E that had a new fleet of E70-E90's, the ability to challenge the competitors on certain routes at a cost savings................................Hel* the list goes on and on !!

So to AMR/AA/A-E/APA etc, I say............."Quit DICKING around and launch this lethal Puppy..YESTERDAY !!!!!!!!!!!!

Too late...AE is for sale to the highest bidder.

 

[jimntx]

What I don't understand is why the company would want to start this fight to buy 70-seaters for a part of the company that they then turned around and announced was for sale???????? And, don't kid yourself, they knew there would be a fight.

If they are going to divest themselves of AE, why not just go a little better and buy the 90-100 seat a/c from Embraer, and fly it on mainline? We really need an a/c in that size range.

 

[Winglet]

If AMR thought they could prevail in the courts to get the 25 more 70 seaters, they would have done it a long time ago.

 

[twaokc]

AA should have kept TWA's 717's and added to it. The best 100 seat aircraft flying.

 

[NewHampshire Black Bears]

AA should have kept TWA's 717's and added to it. The best 100 seat aircraft flying.

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Looking back now..OKC,....your right.