Air- American Eagle moves ahead with restructuring plan- Star Telegram

Posted: October 10, 2012 in Uncategorized

October 9, 2012

American Eagle is still searching for a new name but chief executive Dan Garton said the regional carrier has made significant progress in its restructuring plan.With pilots approving a new contract and the carrier reaching a tentative agreement with its dispatchers Monday, American Eagle has all of its union groups working under new cost-cutting contracts or voting to ratify tentative agreements. Mechanics, ground-school instructors and dispatchers will wrap up voting by Oct. 19.And although the carrier is closing its Los Angeles crew base as American Airlines shifts some of its regional flying to SkyWest Airlines, Garton said, American Eagle is hiring employees, including 1,500 managers, ground crew and customer-service agents to handle ground service contracts that it has won recently.He said the regional carrier is within reach of its goal for $75 million in annual cost cuts as labor contracts are implemented.”We will get to that number,” Garton said in an interview Tuesday with the Star-Telegram. Here are some excerpts:Do you need to lay off any employees with the new labor contracts?We’re actually hiring in every work group. There are locations where there is a need to reduce resources, like Los Angeles, so we don’t need as many pilots or flight attendants based in Los Angeles. But we have simultaneously a help wanted sign for flight attendants and pilots. So we aren’t in a true layoff situation. [For those affected by reductions] at least we are able to offer employment to everyone who is on staff today.With AMR deciding to use the American Eagle brand for all of American Airlines’ regional flying, have you made any progress with finding a new name for the carrier?We are going to need, sooner or later, to find a new title for the company because we don’t want to have the same title that American Airlines uses as a brand for its feed…We are working through a more disciplined process now with some professionals to come up with a name which I expect we will be announcing toward the end of this year or early next year.Has AMR reconsidered divesting American Eagle during the bankruptcy process?It hasn’t been ruled out but I think it is generally felt that it would be like adding three twists to a two-and-a-half reverse dive off a 10-meter platform. While it can be done, it just adds a degree of difficulty we really don’t need right now. So the plan, I would say, is to still fix Eagle as we have been doing, sort out the regional fleet of the future, emerge from bankruptcy and then quickly evaluate whether we should re-launch the divestiture or not.How important was it to have the pilots ratify a tentative agreement?It adds to the momentum I think because now more than half of our employees have ratified contracts. I think you can almost see a little bit of a tipping point…More than half of our $75 million comes from adjustments in the pilots contract so it is significant in many ways.Can you talk about some of the ground-handling contracts that American Eagle has recently been awarded?When the divestiture was halted last year, there also went our ability to really pursue flying for other airlines but we could still pursue ground handling contracts. …We have been pretty successful in growing that business so that by the end of this year Eagle will handle 1,500 flights a day for Eagle. We’ll handle 400 flights a day for other airlines and 200 flights a day for American. And by handle I mean we do the whole thing or everything below the wing or at the ticket counter…so that is a lot of growth for us.


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