EGL Pilots Object to American–Republic Purchase Agreement The ALPA
pilots of American Eagle Airlines filed a formal objection to the capacity
purchase agreement recently announced between American Airlines and Republic
Airways. The objection was filed in the United States Bankruptcy Court for the
Southern District of New York.
The proposed agreement between American and Republic would severely divert
the flying of large regional jets to a competitor and would needlessly undermine
the value of American Eagle, threatening the livelihood of Eagle’s pilots and
other employees at the airline. American Eagle, a wholly owned subsidiary of
AMR, has provided the substantial majority of regional flying for American
Airlines, which is also an AMR subsidiary.
“The Eagle pilots negotiated and approved a labor agreement that provides
Eagle with market-competitive labor rates for the next eight years,” said EGL
MEC Chairman Tony Gutierrez. “This potential deal signifies AMR’s huge and
unnecessary commitment to a third-party company at the expense of its own
employees. If this transaction is approved, it is unclear whether a viable
number of large regional jet opportunities for American would remain available
to Eagle.”
In December, the bankruptcy court approved a long-term
collective bargaining agreement between ALPA and Eagle that met cost-savings
targets that Eagle management and AMR represented as necessary for Eagle to
position itself as competitive in the regional airline industry. In the pilots’
collective bargaining agreement, Eagle management has committed to “aggressively
seek to increase flying opportunities when it is economical, practical, and
feasible to do so, including, but not limited to, bidding on opportunities to
provide additional feed to American Airlines.”
Under the proposed agreement, Republic would operate large regional jets (53
Embraer E175 aircraft) under the American Eagle brand with service to start in
June 2013 and continue to increase through 2015. The agreement will then extend
through 2027, as it will run for 12 years from each of the covered aircraft’s
entry into service.
“Given the lack of disclosure of the economic considerations that led to this
contract, the relationship of this agreement to AMR’s strategic choices, and the
lack of consideration for Eagle’s interests, we believe that the court should
decline to approve the Republic motion,” states the objection submitted by ALPA. |