Tag Archives: American Airlines Group Inc.

Compass Airlines to fly as an American Eagle carrier

Compass Airlines (Minneapolis/St. Paul) has announced it will operate 20 new 76-seat Embraer ERJ 175 aircraft owned by American Airlines, Inc.

Compass expects to begin taking delivery of the aircraft and start scheduled service under the American Eagle brand and livery in the first quarter of 2015. The agreement also provides American the option to place additional E175 aircraft it owns with Compass in the future.

American Airlines, a subsidiary of American Airlines Group Inc. (Dallas/Fort Worth), announced in December 2013 it had signed agreements with Embraer S.A. to purchase 60 new 76-seat E175 regional jets, with options for up to 90 additional aircraft. With continued new aircraft deliveries over the next several years, American will have one of the most modern and efficient fleets in the industry.

The addition of these 20 American aircraft will increase the fleet size of Compass Airlines to 62 aircraft, all of which are either Embraer E175 or E170 aircraft.

The new E175s will offer American Airlines customers a more seamless transition from mainline to regional flights with 12 First Class seats, 20 Main Cabin Extra seats offering additional legroom and 44 seats in the Main Cabin. The aircraft will also feature modern cabin elements including in-flight Wi-Fi, full-size overhead bins, more spacious lavatories, leather seats and adjustable headrests. Powered by General Electric CF34 engines, the E175 also is one of the most fuel efficient 76-seat aircraft in the market today.

Compass Airlines, LLC is a wholly owned subsidiary of Trans States Holdings, Inc. Compass Airlines began commercial service in May 2007 as a NWA Airlink carrier with a mission to provide safe, reliable, cost-effective and customer-friendly service to the passengers it serves. Compass currently has more than 1,200 employees operating 36 Embraer E175 and six Embraer E170 aircraft as a Delta Connection carrier from its Minneapolis/St. Paul (MSP) and Detroit (DTW) hubs, as well as a maintenance facility in Louisville, Kentucky. Compass currently serves 57 cities, operates approximately 200 daily flights, and carries approximately 4 million passengers annually.

The Association of Flight Attendants (AFA) issued this terse statement as a reaction on behave of the Envoy Air FAs:

Envoy Air Flight Attendants, represented by the Association of Flight Attendants-CWA (AFA), issued the following statement after American Airlines management announced the placement of 20 new Embraer 175 regional jets with an industry competitor:

“The hard working professionals across our company have made the American Eagle brand the gold standard within our industry for over 25 years. We were promised a fresh start after bankruptcy, with a new look, new energy and, most of all, new airplanes. American Eagle (now Envoy) employees, whether represented by unions or not, selflessly gave the concessions demanded by management in order to secure these new airplanes and bring our company into a new era of prosperity after emerging from a very dark period in our history.

“What thanks have we received? Apparently NONE. The equipment is being sent to another company which had no connection to the financial restructuring in which we engaged to insure that our company would achieve the profitability it now enjoys – the same profitability which allows it to obtain this new aircraft. For both American Airlines and Envoy Air management to now turn their backs on our award-winning employees by providing no comment as to the future of our airline is unconscionable.

“The demoralizing effect of these misguided decisions continues to weigh heavily on our operation, while long term damage from the loss of in-house profits, loss of qualified pilots, and continued contraction of our aging fleet is quickly approaching critical mass.

“AFA calls upon management to do something very simple, something very American: Make it right. Honor your commitments. Take the high road. Give your 16,000 employees the tools required to return our company to the best-in-class leader we always have been. Now is the time to set Envoy Air on the correct course.”

Copyright Photo: Tony Storck/AirlinersGallery.com. Embraer ERJ 170-200LR (ERJ 175) N406YX (msn 17000369) of fellow American Eagle carrier Republic Airlines (2nd) arrives at Philadelphia.

Delta Connection-Compass: AG Slide Show

NWA Airlink-Compass: AG Slide Show

American Eagle-Republic: AG Slide Show

Bombardier delivers the first CRJ900 to American for PSA Airlines

American Eagle-PSA (2nd) CRJ900 N547NN (13)(Delivery Ceremony) (Bombardier)(LRW)

Bombardier Aerospace (Montreal-Mirabel) has delivered the first of 30 enhanced CRJ900 NextGen aircraft to American Airlines Group Inc. (Dallas/Fort Worth). The aircraft will be operated by American Airlines Group wholly owned subsidiary PSA Airlines, Inc. (Dayton) under the American Eagle brand. The purchase agreement for the aircraft, which was announced in December 2013, also included options on an additional 40 CRJ900 NextGen aircraft.

The pictured Bombardier CRJ900 (CL-600-2D24) N547NN (msn 15317) was delivered on June 5.

PSA Airlines currently operates as an US Airways Express operator.

Previously the aircraft was unveiled to American Airlines employees and PSA Airlines employees at Dallas/Fort Worth International Airport and in Dayton, Ohio.

American Airlines is the first customer to take delivery of the enhanced CRJ900 NextGen regional jet, which provides up to 5.5 per cent fuel burn reduction over earlier-generation CRJ900 aircraft.

The delivery ceremony at Bombardier’s Mirabel, Québec, facility was attended by senior executives and employees of American Airlines, PSA Airlines, Bombardier and major suppliers to the CRJ Series regional jet program.

As of March 31, 2014, Bombardier had recorded firm orders for 1,817 CRJ Series aircraft, including 343 CRJ900 and CRJ900 NextGen aircraft. Worldwide, CRJ Series aircraft are in service with more than 60 airlines and more than 30 customers operate corporate variants of the aircraft. The aircraft are operating in more than 50 countries on six continents, and on average, a CRJ aircraft takes off every 10 seconds somewhere in the world. CRJ Series aircraft have transported more than 1.4 billion passengers and have logged more than 39 million flight hours and over 32 million takeoffs and landings.

Copyright Photo: Bombardier.

American Airlines (current): AG Slide Show

US Airways Express-PSA Airlines: AG Slide Show

American Airlines Group reports its combined fourth quarter and full year financial results

American Airlines Group Inc. (American Airlines and US Airways) (Dallas/Fort Worth) today reported fourth quarter and full year 2013 results.

  • As the result of the merger which closed on Dec. 9, 2013, US Airways Group became a subsidiary of AMR Corporation which changed its name to American Airlines Group Inc. (AAG)
  • Fourth quarter 2013 combined net profit was $436 million on a non-GAAP basis excluding net special charges. This represents a $478 million improvement versus the company’s combined fourth quarter 2012 non-GAAP net loss of $42 million excluding net special credits
  • 2013 combined net profit was $1.9 billion on a non-GAAP basis excluding net special charges, a $1.5 billion improvement versus the company’s combined 2012 non-GAAP net profit of $407 million excluding net special charges
  • The company ended the year with $10.3 billion in total cash and investments. Since the merger, the company has used more than $300 million of cash to reduce its diluted shares outstanding by approximately 14 million

For the fourth quarter 2013, AAG reported a GAAP net loss of $2.0 billion, which includes $2.4 billion of net special charges. This compares to a net profit of $262 million, which includes $350 million of net special credits in the fourth quarter 2012. AAG’s GAAP financial results include the results for US Airways only for the period from the completion of the merger on Dec. 9, 2013 through Dec. 31, 2013.

For full year 2013, GAAP net loss was $1.8 billion, which includes $3.1 billion of net special charges. This compares to a full year 2012 net loss of $1.9 billion, which includes $1.7 billion of net special charges.

The company believes it is more meaningful to compare year-over-year results for American Airlines and US Airways on a combined basis, which is a non-GAAP formulation that combines the results for AMR Corporation and US Airways Group. Therefore, it includes the results of US Airways Group for the full period (not just the period since the merger closed). See the accompanying notes in the Financial Tables section of this press release for further explanation of this presentation, including a reconciliation of GAAP to non-GAAP financial information.

Fourth quarter 2013 combined net profit was $436 million on a non-GAAP basis excluding net special charges. This compares to a combined non-GAAP net loss of $42 million excluding net special credits for the same period in 2012. Based on a diluted share count of 742 million, fourth quarter 2013 diluted earnings per share was $0.59 on a non-GAAP basis.

For 2013, the company’s combined net profit was $1.9 billion on a non-GAAP basis excluding net special charges. This represents a $1.5 billion improvement over the company’s combined 2012 non-GAAP net profit of $407 million excluding net special charges.

“The early returns on our merger are very positive,” said Doug Parker, CEO of American Airlines Group Inc. “Our teams are working well together and our customers are already beginning to see the benefits of our combined network. We have much work ahead, but believe we are on our way to restoring American as the greatest airline in the world. These financial results are evidence of the strong foundation we have in place and we anticipate improving upon these results as we further integrate our operations in 2014.”

Merger Integration 

Since closing the merger on December 9, 2013, the company has made significant progress in integrating American Airlines and US Airways. Key accomplishments include:

  • Launched the first phase of codesharing which offers customers improved access to the company’s global network by allowing them to book select flights on both airlines’ networks
  • Provided reciprocal benefits for Club members and Elite members, including priority check-in, waiver of fees for checked bags, complimentary access to preferred seats, priority security, early boarding and priority baggage delivery
  • Allowed AAdvantage® and Dividend Miles members to earn and redeem miles when traveling across either airline’s network
  • Trained more than 85,000 customer-facing employees

Revenue and Cost Comparisons

On a combined basis, total revenues in the fourth quarter were $10.0 billion, up 8.7 percent versus the fourth quarter 2012 on a 3.4 percent increase in total available seat miles (ASMs). Fourth quarter combined consolidated passenger revenue per ASM (PRASM) was 13.64 cents, up 5.0 percent versus the fourth quarter 2012, driven by a 5.3 percent increase in yield.

Strong demand and high load factors led to 2013 total combined revenues of $40.4 billion, which were up 4.7 percent versus 2012. Full year combined consolidated PRASM was 13.67 cents, up 2.6 percent versus 2012.

Total combined operating expenses in the fourth quarter were $9.7 billion, up 7.0 percent over fourth quarter 2012. Combined fourth quarter mainline cost per available seat mile (CASM) was 14.17 cents, up 4.2 percent on a 3.6 percent increase in mainline ASMs versus fourth quarter 2012. Excluding special charges, fuel and profit sharing, mainline CASM was flat compared to the fourth quarter 2012, at8.49 cents. Regional CASM excluding special charges and fuel was 15.73 cents, up 1.8 percent on a 1.6 percent increase in regional ASMs versus fourth quarter 2012.

For the full year 2013, total combined operating expenses were $37.8 billion, up 0.6 percent versus 2012. Excluding special charges, fuel and profit sharing, combined mainline CASM decreased 3.1 percent to 8.37 cents versus 2012. Regional CASM excluding special credits and fuel increased 1.1 percent to 15.38 cents versus 2012.

Liquidity and Financing Transactions

As of December 31, 2013, American had $10.3 billion in total cash and investments, of which $1.0 billion was restricted. The company also has an undrawn revolving credit facility of $1.0 billion. Approximately $710 million of this unrestricted cash balance was held as Venezuelan bolivars, valued at the weighted average applicable exchange rate of 6.04 bolivars to the dollar. The period of time to exchange those funds into dollars and repatriate them has been increasing and is presently more than a year. On January 24, 2014, the Venezuelan government announced that a newly-implemented system will determine the exchange rate (currently 11.36 to the dollar) for repatriation of income from future ticket sales, and introduced new procedures for approval of repatriation of local currency. American is working with Venezuelan authorities regarding the timing and exchange rate applicable to the repatriation of funds held in local currency.

During the fourth quarter, the company elected to pay approximately $300 million in tax withholdings for employees under the Plan of Reorganization in lieu of issuing shares of common stock, thereby reducing the number of shares issued under the Plan by approximately 13 million. On January 9, 2014, the first distribution date, the company paid approximately $23 million in additional employee tax withholdings in lieu of issuing approximately 1 million shares of common stock. The company may make a similar election on future distribution dates as both a service to our team members and an indication of our confidence in the value of our common stock.

Additional balance sheet and liquidity detail will be included in the company’s Form 10-K to be filed in February.

During the fourth quarter, the company engaged in these additional financing transactions:

  • Completed the American Airlines offering of the Series 2013-2B EETC in aggregate face amount of $512 million and the Series 2013-2C EETC in aggregate face amount of $256 million
  • Amended the American Airlines term loan facility and the revolving credit facility to lower the applicable LIBOR margins to 3.0% for both offerings. As part of this amendment, the LIBOR floor with respect to the term loan facility was reduced from 1.0% to 0.75%
  • Utilized the floating rate debt market to refinance eight US Airways aircraft (six A321s and two A320s) at significantly reduced rates
  • Financed two US Airways spare engine deliveries with a floating rate debt facility originated in 2012 while negotiating an interest rate reduction for the entire facility
  • On Jan. 16, 2014 the company also amended the US Airways term loan facility, to lower the applicable LIBOR margin from 3.0% to 2.75% for Tranche B1. In addition, the LIBOR floor was reduced from 1.0% to 0.75% on both the Tranche B1 and Tranche B2 loans

Special Charges

In the fourth quarter, the company recognized a combined total of $2.4 billion in net special charges, including:

  • $2.2 billion in net reorganization charges consisting primarily of a deemed claim to employees, professional fees and estimated allowed claim amounts
  • $497 million in operating expense net special charges primarily related to the pilot memorandum of understanding that became effective upon merger close, merger related costs and professional fees and a charge related to the pilot long-term disability obligation
  • $324 million in non-cash income tax benefits primarily related to gains recorded in Other Comprehensive Income, offset in part by a charge related to deferred tax liabilities on indefinite lived assets
  • $31 million in operating revenue net special credits related to a change in accounting method resulting from the modification of the company’s AAdvantage® miles agreement with Citibank
  • $21 million in non-operating net special charges primarily related to interest charges to recognize post-petition interest expense on unsecured obligations

Notable Accomplishments

Additional Integration Related

  • On December 9, 2013, US Airways Group became a subsidiary of AMR Corporation which changed its name to American Airlines Group Inc. The company’s common stock began trading on the NASDAQ Global Select Market under the ticker “AAL”. Union presidents and more than 1,000 of the company’s employees joined American’s senior management team for the televised NASDAQ opening bell ceremony
  • Announced the new leadership team through the Managing Director level
  • Co-located our revenue management team to ensure the company is executing pricing and revenue management strategies as one organization
  • Took the unprecedented step of asking team members to vote to select the aircraft livery of the merged carrier. More than 60,000 team members participated

Fleet/Network

  • Continued to modernize its fleet with new, fuel-efficient aircraft. The company inducted thirteen Airbus A320 family aircraft, two A330-200 aircraft, five Boeing 737-800 and one Boeing 777-300 aircraft into its fleet
  • Signed agreements with Bombardier Inc. and Embraer S.A. to purchase 90 new 76-seat regional jets that will replace smaller, less efficient 50-seat regional aircraft scheduled for retirement
  • Began nonstop service between its largest hub at Dallas/Fort Worth and Bogota, Colombia and Roatan, Honduras and announced proposed new service between Dallas/Fort Worth and Hong Kong and Shanghai
  • Began nonstop service between its Miami hub and Curitiba and Porto Alegre, Brazil
  • Expanded the company’s international reach from its hub at Charlotte, North Carolina with the announcement of new, seasonal summer service to Barcelona, Spain; Brussels, Belgium; Lisbon, Portugal and Manchester, England
  • Announced the company will begin service to Edinburgh, Scotland from its Philadelphia hub this summer
  • Held the grand opening of an expanded Terminal F in PHL, the exclusive home of US Airways Express. The airport project which was managed by the company, quadrupled the facilities central area to 37,000 square feet and added 20 new food, beverage and retail outlets for our customers

Copyright Photo: Bruce Drum/AirlinersGallery.com. American’s Boeing 767-323 ER N388AA (msn 27448) arrives at the Miami hub.

American Airlines (current): AG Slide Show

American Airlines (historic): AG Slide Show

US Airways: AG Slide Show

The “new American” to operate under the umbrella of the American Airlines Group Inc.

AMR Corporation (Dallas/Fort Worth), whose principal operating subsidiary is American Airlines, Inc. (Dallas/Fort Worth), and US Airways Group, Inc. (Phoenix) today announced that they have applied to list the common stock of the combined company on the NASDAQ Global Select Market. Upon closing of the merger and AMR’s emergence from Chapter 11, the combined company will be renamed American Airlines Group Inc. and will use the ticker symbol “AAL.” Additionally, the common stock of both US Airways Group, Inc. and AMR Corporation will be cancelled and shareholders will receive equity interests in American Airlines Group Inc. per the terms of the Merger Agreement and Plan of Reorganization.

Copyright Photo: Ken Petersen/AirlinersGallery.com. American Airlines’ Boeing 777-323 ER N721AN (msn 31546) prepares to touch down in New York (JFK).

American Airlines: AG Slide Show