American Airlines Group has backed away from its threat to liquidate its regional carrier American Eagle but it still plans to shift planes away from the regional carrier after the union rejected a 10-year contract, the union’s top officer said Thursday.
“The agreement we chose not to pursue last week is all [management is] willing to do, that is their line in the sand and they’re not going to do anything else,” said Bill Sprague, chairman of the Air Line Pilots Association’s Eagle unit.
In a letter sent to pilots on Thursday, the Fort Worth-based parent of American and American Eagle said it’s likely that CRJ-700s currently flown by Eagle, which seat about 70 passengers, will be moved to another carrier.
“Now, with the future of our flying so unclear, we anticipate having a difficult time staffing our cockpits,” said American Eagle’s vice president of flight, Jim Winkley, in the letter. “The CRJs are the most likely candidate to be removed from Eagle, because of costs and complexities of operating multiple fleet types.”
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Winkley reiterated that the company would not be returning to the bargaining table with Eagle’s pilots union.
The union and management have not had any sit-down meetings since the union leadership voted against the proposed contract last Wednesday. Sprague said pilots are taking American’s threat very seriously, which is creating stress among the carrier’s 2,800 pilots. However, he added that pilots have sent hundreds of emails and phone calls to their union leaders in support of not accepting the concessionary contract.
American had proposed allowing Eagle pilots to fly new larger regional aircraft in exchange for a wage freeze until 2018 and the elimination of profit-sharing. Sprague said pilots are unwilling to accept the ten-year contract that would lock them into wage rates near the bottom of the industry.
American has said it will rename its regional carrier Envoy this spring as it expands its use of outside carriers to fly routes under the Eagle brand.
Eagle’s pilots are also waiting to see the results of another regional carrier’s pilot contract negotiations, Republic Airways. Late last week, Republic announced that it had reached a tentative deal with its pilots union that includes significant pay increases. Republic’s pilots union leaders are scheduled to vote on the contract on Friday. Earlier this month, Republic said it was grounding 27 jets because it didn't have enough pilots to operate them.
At American Eagle, a new hire makes $26 an hour. Based on a guarantee of 72 hours a month, the first officer would make about $22,464. Eagle is offering $5,000 signing bonuses to new pilots who agree to stay with the carrier for two years. Captains, however, can earn significantly more, with pay rates of $67 to $104 an hour.
Sprague said Eagle pilots feel that they have options to either move to another regional carrier with better wages or to a mainline airline, like Delta Air Lines or American, which are currently hiring pilots. Eagle is losing about 30 pilots a month to other airlines or careers, Sprague said. That figure does not include the 20 pilots moving to American each month as part of the “flow-through” clause in its existing contract.
“We are interested in seeing the success of a carrier that still respects us as the pilot group that we are,” Sprague said. “The ball is in their court right now.”