American Eagle pilots warned they might need to make more concessions

Posted Wednesday, Jul. 10, 2013  comments  Print Reprints

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American Eagle pilots have been told they may need to consider additional contract concessions in order for the regional carrier to survive.

In a letter sent to the pilots Monday, Eagle pilots union Chairman Tony Gutierrez said the regional airline industry is in “disarray,” noting that Delta Air Lines recently announced it will be able to cut its costs dramatically by 2017 with contract clauses allowing it to reset rates at its regional feeders to match its second-lowest contract.

Some of Delta’s regional feed is provided by Pinnacle Airlines, which emerged from bankruptcy in May as a subsidiary of Delta with lower pilot contract costs.

“US Airways management advised us that in light of that development, it is not willing to place the next ‘large’ [regional jet] order at Eagle or any other regional airline that does not have a plan in place to trend toward Pinnacle’s cost structure. And that is where we find ourselves today,” Gutierrez wrote.

The Air Line Pilots Association, which represents Eagle pilots, is meeting this week with American management to discuss contract options.

Before it filed for bankruptcy, American Eagle’s parent, AMR Corp., discussed selling or divesting the regional carrier, but those plans were put on hold. AMR plans to merge with US Airways by the end of the year and Doug Parker, who will be the CEO of the combined company, has said publicly that he has not made any decisions about Eagle’s future.

Officials of both US Airways and American declined to comment Tuesday evening on Gutierrez’s letter.

Separately, a new document released by Texas Attorney General Greg Abbott shows he has been involved since March in the Justice Department’s investigation of the proposed merger of American Airlines and US Airways.

Abbott is leading a group of 19 attorneys general investigating the merger over concerns that their states might lose air service or a hub when the carriers combine.

On Tuesday, Abbott’s office released the confidentiality waivers by American and US Airways, allowing the attorneys general to receive information and documents that the airlines have submitted to the Justice Department as part of its antitrust review.

The merger needs government regulatory approval. US Airways shareholders are expected to vote on the merger at their meeting Friday. The new airline, which will be called American Airlines, will be based in Fort Worth.

Also Tuesday, AMR said passenger traffic at American Airlines and American Eagle rose 2.4 percent in June.

AMR said it boosted capacity by 2.6 percent and its consolidated load factor declined slightly, down 0.2 percentage points to 86.9 percent.

Unit revenues also grew 1.7 percent compared with June 2012, a record high for any month, AMR said.

International traffic increased 5.5 percent as the carriers added 6.4 percent more capacity. Its international load factor dropped 0.7 points to 85.6 percent. Domestic traffic rose to 0.5 percent on a capacity increase of 0.3 percent. Its domestic load factor was 0.2 points higher at 88.8 percent.

Dallas-based Southwest Airlines also released June traffic figures Tuesday and said its passenger traffic grew 2.3 percent as it increased its capacity 1.7 percent.

The carrier also had fuller flights as its load factor also rose 0.6 points to 85.0 percent, compared with June 2012.

However, unit revenues decreased about 1 percent, the carrier said Tuesday.

Andrea Ahles, 817-390-7631 Twitter: @Sky_Talk

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