American Airlines

May 20, 2014

American Airlines says it won’t merge regional carriers

PSA Airlines, a regional carrier formerly operated by US Airways, will operate the new 76-seat CRJ-900s produced by Bombardier.

American Airlines has no plans to combine its three regional airline subsidiaries into one even as the Fort Worth-based carrier is looking to other third-party regional operators to fly under the American Eagle brand.

“All three play a very important role in achieving regional feed that is really important for our regional customers,” Kenji Hashimoto, American’s senior vice president of regional carriers, said at an event Tuesday where the airline showed off a new CRJ-900 regional jet that it will receive from Bombardier in June.

After its merger with US Airways in December, American Airlines Group now owns three regional airlines: Piedmont Airlines, PSA Airlines and Envoy Air, formerly American Eagle. The two-class CRJ-900s will be flown by its wholly owned subsidiary, PSA Airlines, under the American Eagle brand. But the carrier hasn’t disclosed which routes it will use the aircraft on.

“The economics of the plane are very good,” Hashimoto said. “It allows you to economically with competitive costs fly in the markets where customer demand is there but at the same time has all the features that our customers appreciate.”

PSA will add to its fleet with the new aircraft while Envoy Air may shrink as its older, less-fuel-efficient aircraft are retired. Hashimoto said Envoy, with its 200 aircraft, remains a sizable operation for American.

Envoy’s pilots turned down a proposed contract this year that would have guaranteed the airline would receive some of the 60 larger Embraer jets that American has on order, in exchange for a pay-scale freeze.

Hashimoto said the company is in talks with other carriers to operate the Embraer E-175s, which will be delivered to American next year. He downplayed any problems that American’s partners may be having recruiting pilots to work at the regional airlines, which pay pilots much less than mainline carriers.

“We’ve found a lot of the carriers we do business with are able to hire the pilots that they need to serve the schedules they need and also the ones we are talking to seem comfortable they can find the pilots to staff those planes,” Hashimoto said.

The Air Line Pilots Association, which represents Envoy’s pilots, called Tuesday’s aircraft showing a distraction for its crews and said it displayed an “utter disregard” for Envoy’s 2,700 pilots, who were not given a chance to operate the CRJ-900s.

“We were not notified by the company of this event. Rather than displaying this aircraft at a PSA base, [American] has decided to publicize this aircraft in our largest base,” the union said in a message sent to members Monday. “It’s time for [American’s] management to realize that the regional airline industry is experiencing an unprecedented pilot shortage due to poor pay and that the classic whipsawing tactics of the 20th century benefit no one.”

The Embraer and Bombardier aircraft were part of a 90-plane order that American made in December valued at about $4 billion. American has ordered 30 CRJ-900s and has the option to buy 40 more. The 76-seat aircraft has 12 first-class seats, 36 main cabin extra seats and 28 standard economy seats.

“As there’s more pressure put on the economics of the aircraft, as manufacturers, we strive every day to reduce the operating costs and to improve the fuel efficiency of the product,” said Kevin Smith, Bombardier’s vice president of sales for the Americas.

Smith said the aircraft reduces fuel consumption by 5 percent compared with older models and also has new side walls, larger overhead compartments and bigger windows.

“All these benefits translate into passenger comfort and for the branding that American wants to put forward to the customer,” Smith said.

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