American Eagle For Sale

[FWAAA]

Burning furniture is never a good idea, IMO.

Since AMR bought all of the Eagle airlines, AA has not had to pay someone else a profit on the Eagle flying. Not so at the other legacies that own none of their regional feed. While the guaranteed profits on those capacity purchase agreements have come down somewhat, most are still in the range of cost plus 6% to 8% guaranteed profit. Anybody notice that Mesa, Republic and other regionals are enjoying near-record stock prices while the mainline stocks have suffered?

 

[lpbrian]

Well, it looks like American Eagle is on the chopping block. AA's maintenance bases will be the next part of the company up for sale. The people at AFW,TUL,MCI had better get a line maintenance spot as quick as possible,if they can. Once the bases are sold, those people will be stuck at an MRO with no flight benefits and knowing the evil TWU,probably lower wages as well.

I'm not sure those bases are AA's to sell.

 

[donttouchthebeauty]

Burning furniture is never a good idea, IMO.

Since AMR bought all of the Eagle airlines, AA has not had to pay someone else a profit on the Eagle flying. Not so at the other legacies that own none of their regional feed. While the guaranteed profits on those capacity purchase agreements have come down somewhat, most are still in the range of cost plus 6% to 8% guaranteed profit. Anybody notice that Mesa, Republic and other regionals are enjoying near-record stock prices while the mainline stocks have suffered?

well, i do believe that USAIRWAYS still owns piedmont and psa... however much of their stuff i.e. EMB170s have been farmed out to Republic... Sad .. very very sad...

 

[FWAAA]

well, i do believe that USAIRWAYS still owns piedmont and psa... however much of their stuff i.e. EMB170s have been farmed out to Republic... Sad .. very very sad...

True - but I was talking about UA and CO, which own none of their regional flying. DL still owns some of theirs (Comair) and I think NW owns some of theirs (dunno among Mesaba, Pinnacle, etc.). US has had too many regionals for me to keep track. Appears to me that much of US flying is done on various old certificates (wholly-owned, of course).

 

[eolesen]

They've quietly been building up departments at Eagle to handle things which used to be handled by AA (i.e. capacity planning, product design, financial planning, HR) over the past couple years, so this was not just a knee-jerk reaction to the FL "demands" to monetize AMR's assets.

Since AMR bought all of the Eagle airlines, AA has not had to pay someone else a profit on the Eagle flying.

Well, not exactly. As part of what I mentioned above, Eagle was moved to a capacity purchase pricing basis a couple years ago. That was one of the first signs internally that Eagle was being set up for a spin-off.

So, yes, Eagle makes money on paper, but it really isn't clear how much of that simply offsets overhead which AMR provides and Eagle never directly pays for (i.e. procedures, non-rev travel, real estate, etc.).

 

[Slopoke]

Well, it looks like American Eagle is on the chopping block. AA's maintenance bases will be the next part of the company up for sale. The people at AFW,TUL,MCI had better get a line maintenance spot as quick as possible,if they can. Once the bases are sold, those people will be stuck at an MRO with no flight benefits and knowing the evil TWU,probably lower wages as well.

If that were to happen. I am very interested as to how the TWU would handle it. Because I would assume that some would want to stay with AA as a line mechanic at a line station. How would one bump into the line "system"? Would bumping be limited to only displacing those without system protection? Would the TWU make a deal to allow unlimited bumping of overhaul mechanics displacing line mechanics as long as the overhaul mechanic had more senority? Would the displaced line mechanic have to backfill a vacancy at an overhaul base created by a bumping mechanic? Just a little thinking out loud on my part.

 

[lpbrian]

I think you have to have layoffs for any bumping to occur.

 

[jj]

Wonder if this opens the door for AX flying into JFK and wherever they want cheap flying to connect AA big jets.I have a feeling this opens up cheaper flying into major hubs MIA LAX look for big changes their. :unsure:

 

[jimntx]

JMHO, this is a bad mistake. AFAIK, there has never really been a successful "outsourcing" of a strategic company asset in any industry that ended up working for the long-term benefit of the parent company.

This argument that if they are not part of us we can contract with them at a price that suits us is a fallacy. It assumes that if AE is independent they will still be at the mercy of AMR corporation for business. In fact, it frees them to do business with UAL, or CO, or DL--whoever wants/needs their services, and is willing to pay the top dollar.

Moreover, outsourcing in other industries has proven to be a short-term "savings" and a long-term cost in the kiester. For instance, companies that have outsourced computer support to India or other countries in Asia have found that over time it has caused them to lose customers who don't have the patience to repeat the problem 4-5 times until the person on the other end finally understands that "No, I've already tried re-booting. That didn't help."

Also, companies that thought that they were saving money by outsourcing have found that over time it has actually cost them more because they get charged every time the service provider breathes deeply whereas when they had that service in-house with people on straight salary, they could ask them to work late or work weekends or re-do 3-4 weeks of work at not extra charge. Not so with outsourced departments.

How does this affect the flow-through/flow-back arrangement with the pilots? I can't believe they would allow this to happen. It's all well and good to say pilots that have flowed-through to Eagle have to stay there, but then in the future if there is a cutback, APA members will have nowhere to go but to the unemployment line.

 

[Maark767]

AA will shed itself of AE and then AE will take over AA and pay all employees besides the Pilots AE wages, with a staple job to all AA employees on the payroll before the AA/TWA merger. Former TWA employees will be given DOH at that time. It will be bitter sweet. AA employees deserve what they get.

It was an aquisition not a merger...

 

[swdriver]

It was an aquisition not a merger...

REALLY, Carty and Compton called it a merger at the time.

 

[Maark767]

REALLY, Carty and Compton called it a merger at the time.

Thats not true.. It has always been an aquisition..... anyone that knows anything about it, knows it as that , an aquisition. Get it right or dont post...

 

[swdriver]

Thats not true.. It has always been an aquisition..... anyone that knows anything about it, knows it as that , an aquisition. Get it right or dont post...

Who made you GOD of the board? If you will go back when Carty and Compton announced the deal, they both called it a MERGER. Carty was the first to say it.

 

[kirkpatrick]

JMHO, this is a bad mistake.

Could be, but the fat lady ain't sung yet. One thing that makes me think it might be a good idea is the fact that AA generally does its homework before moves of this magnitude, and if they figure it's good for the company, then maybe it deserves some study.

But the best thing is that maybe it'll put an end to that mantra that "everything is going over to Eagle."

MK

 

[MiAAmi]

Maybe AMR should divest itself of the A300 as well. Seems like they are all running about 2 hours late if running at all this week.