AMR Briefs Eagle Pilots on Divestiture Amid Union Review

News about this airline - please include a link to the source as well as the article text itself.
Web site: See American Airlines
User avatar
Forum Administrator
Forum Administrator
Posts: 31842
Joined: Fri May 12, 2006

AMR Briefs Eagle Pilots on Divestiture Amid Union Review

Unread post by bimjim » Mon Feb 28, 2011 ... eview.html

AMR Briefs Eagle Pilots on Divestiture Amid Union Review
By Mary Schlangenstein
Feb 28, 2011

AMR Corp. executives and bankers are briefing American Eagle pilot leaders about the regional airline’s possible divestiture as the union steps up its own review of the carrier’s future.

Union officials will meet this week with investment bankers hired by AMR to evaluate whether Eagle might best be sold, spun off to shareholders or divested in another form, Tony Gutierrez, chairman of the Air Line Pilots Association unit at Eagle, told members yesterday in an e-mail.

AMR, the parent of American Airlines, has been studying options for Eagle since June as a way to reduce the cost of ferrying passengers to the larger carrier’s hubs from small airports. Investment bank Evercore Partners Inc. and consultant Bain & Co. are advising AMR.

“I have a tough time figuring out, other than spinning it off to shareholders, what they could do,” said Robert W. Mann, president of consultant R.W. Mann & Co. in Port Washington, New York. “I don’t see any interest from an outside party.”

AMR rose 9 cents, 1.3 percent, to $6.73 at 1:35 p.m. in New York Stock Exchange composite trading. The company isn’t commenting on its plans for Eagle, said Ed Martelle, a spokesman for Fort Worth, Texas-based AMR.

Gerard Arpey, chief executive officer of AMR and American, met with the regional airline’s pilots last week, along with Eagle CEO Dan Garton, Gutierrez told union members yesterday. Garton will brief the union’s leadership again at meetings starting on March 9, Gutierrez said.

‘Rapidly Changing’

“Please be patient as we work to get you accurate and timely facts in a rapidly changing environment,” Gutierrez wrote.

The union chief told Eagle pilots in a Feb. 4 message that a spinoff, with AMR shares split between the parent company and the new Eagle, seemed to be “the most likely scenario” for the unit’s future.

Operating as an independent company would give Eagle the opportunity to compete for flying contracts with other airlines. American studied a divestiture on at least one other occasion before pulling the business off the market in July 2008.

AMR doesn’t break out complete financial data on Eagle, such as debt or whether the unit is profitable. Revenue from regional operations rose 16 percent in 2010 to $2.33 billion. That was more than 10 percent of AMR’s $22.2 billion total. Eagle’s traffic, or miles flown by paying passengers, rose 6.7 percent last year.

Eagle operates more than 1,500 daily flights to more than 170 cities in the U.S., Canada, Mexico and the Caribbean.

Post Reply

Return to “American Eagle / Executive Airlines- Puerto Rico”