Monday, March 03, 2014

American Eagle to Leave San Angelo?

I flew in the seat next to an American Eagle pilot months ago.  He informed me that Eagle shut down its LAX operation and that top brass was considering closing Miami and DFW.  He said "it's all about the numbers."

As a longtime Eagle pilot he said he still made a decent salary, but the company was making it harder to do so.  He stated he needed to stay with his aircraft which the company moved far away from his home in East Texas.  The pilot lamented he would not be able to support his family on the low wages being paid new pilots and may need to make a different career choice. 

I thought this conversation odd in light of city leaders' efforts to recruit another regional airline to serve San Angelo and the number of full planes I'd flown in the last several years.

Yet, his story is borne out in a GAO study on regional airline pilot low pay.  Some regional carriers are choosing to shutter capacity rather than raise wage rates.  American Eagle is one of them. 

The Star Telegram recently reported:

American Eagle, the regional subsidiary of Fort Worth-based American Airlines Group, may get smaller after a pilots union rejected a proposed 10-year contract agreement.

American will look for other regional carriers to fly its new aircraft on short-haul flights after the leaders of Eagle’s pilots union decided late Wednesday not to send a proposed contract to members for a vote, a top executive said Thursday.
In a letter sent to all 14,000 Eagle employees, the regional carrier’s president, Pedro Fabregas, said American has “no choice but to begin looking for another regional carrier.”

“I have no reason to believe American will offer us new large regional jet flying after these unsuccessful negotiations,” Fabregas wrote.

Tensions are running high between American Eagle’s management and the Air Line Pilots Association. 

The union said American has threatened to shrink and eventually liquidate Eagle, which is being renamed Envoy this spring as American expands its use of outside carriers to fly routes under the Eagle brand. As a result, the union said, it will help its pilots find other careers at a time when the industry has a shortage of qualified pilots.

San Angelo was mentioned in the piece as a feeder city:

With its hub network, analysts say, American needs the passengers whom Eagle feeds into its hubs to fill up the larger planes it’s buying for transcontinental and international flights. Analysts also question how fast American can reach a deal with other regional carriers that are also dealing with pilot shortages.

“I don’t know how seriously intended this is, nor do I know how seriously American has considered how quickly it could re-create the lift it needs for their hubs,” Mann said.

But aviation consultant Mike Boyd disagrees that American would be hurt if Eagle is downsized.

“It’s an entity that has declining value in the marketplace, and with the pilot shortage, they should have shut it down in bankruptcy,” Boyd said.

In an analysis of Dallas/Fort Worth Airport, Boyd said Eagle brings in about 4 percent of the passengers. If Eagle were liquidated, the passenger traffic would likely be picked up from other markets, since American is running relatively full flights at its largest hub.

“The feed you’re getting from San Angelo, if it went away, it’s not going to kill the airline,” Boyd said.
We may be a pawn in the regional airline war.

During labor negotiations, it’s difficult to know whether threats by the company or the union are going to come true

Time will tell.

Update 3-7-14:  Dallas Morning News reported the pilot union will vote on the contract after all.

Update 7-19-15:   American is storing jets it intends to sell at SJT.  Airport Advisory Board minutes from 5-7-14 show American will lay off 45% of their pilots by selling these aircraft, i.e. reducing services.
ead more here:

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