AMR, Inc., the parent company of American Airlines and American Eagle is doing everything it can to make the American Eagle Spin-Off successful.  More details are percolating to the surface and now we see that in addition to AMR taking on American Eagle’s debt and leasing aircraft at a nominal fee to American Eagle, it’s giving American Eagle a 9 year contract for flying that tapers off during that duration.

Right now, American Eagle performs about 90% of all regional flying for American Airlines in areas as diverse as the Caribbean, Canada and throughout the United States.   That will slowly end as American also gets the right to withdraw flying by aircraft type over the length of the contract.  In theory, this lets both parties have an orderly transition and it doesn’t preclude American Eagle from winning that flying back in a competitive bid for the contract.

Regardless, it’s hard for me to imagine American Eagle flying off with success.  The airline is burdened with aircraft ill suited to competitive flying against other regional airlines and its labor contracts are some of the most generous around.  Furthermore, just how far AMR is going to divest itself from American Eagle is an indication of just how difficult it is to sell the airline and if no one wants it, there is a reason for that.

Filed under: Airline News by ajax
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