Air Transport World

Ready to soar: American Eagle spreads its wings.(Regionals)

A little more than a year ago, American Eagle found itself in the unlikely position of pulling seats out of its Saab 340s, placing a For Sale sign on its Executive Airlines subsidiary and shifting 10 of its Embraer regional jets to another airline. All of this was occurring, mind you, during a period of unprecedented growth for North America's Regional airline segment.

What in the world were the folks at Eagle thinking? Two words: Scope clause. "Obviously, something you never want to do is to take seats off small airplanes," Eagle President Peter Bowler tells ATW. Nevertheless, Bowler, who was named president in 1998, had little choice. The post-9/11 cutbacks at American Airlines meant that its Regional affiliate--AA and Eagle both are owned by AMR Corp.--also had to shrink in order to stay in compliance with the mainline's pilot contract, which dictated that Eagle could not fly any more ASMs than it was flying on the day the first pilot at American was furloughed. Needless to say, that clause was negotiated during the go-go 1990s when the word downsizing wasn't in any airline manager's vocabulary.

For Eagle it was a frustrating situation to be sure, but one that was eased in April 2003 when American and its pilots, negotiating under the threat of bankruptcy, settled on a new formula that gives the Regional room to grow. Under the revised agreement, Eagle may operate "110% of the number of aircraft [equal to] the number of narrowbody aircraft in the American fleet," according to Gregg Overman, a spokesperson for the Allied Pilots Assn., which represents pilots at the mainline but not at Eagle, where the Air Line Pilots Assn. holds sway. Overman makes it clear that APA is not happy with the new deal but says that with American on the edge of Chapter 11 the union felt it had little choice but to grant relief. …

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