Tag Archives: American Eagle Airlines 2nd

Republic Airways Holdings and American Airlines reach a long term agreement, Shuttle America to be phased out

American Eagle Airlines (2nd)-Republic Airlines (2nd) Embraer ERJ 170-200LR (ERJ 175) N137HQ (msn 17000231) CLT (Jay Selman). Image: 402600.

Republic Airways Holdings Inc. has announced it has reached an agreement with American Airlines that secures a long-term relationship between the two airlines and has also filed a motion for its approval in the United States Bankruptcy Court for the Southern District of New York.

The amended agreement provides for:

  • a single capacity purchase agreement that prescribes the flying commitments and obligations of Republic and American related to the legacy American and US Airways capacity purchase agreements;
  • permitting the removal of certain aircraft, an extension in duration of Republic’s flying for certain aircraft for American, which will facilitate Republic’s ability to favorably restructure the remaining aircraft financing obligations, and allowing for the potential restoration of service of a certain number of aircraft, subject to Republic’s ability to secure suitable financing of the aircraft;
  • facilitates Republic’s transition to a single air carrier operating certificate by reconfiguring 80-seat aircraft to 76-seat configuration (Embraer 175s).

The parties anticipate that the motion will be heard before the Honorable Sean H. Lane on September 21, 2016. The new agreement will become effective in accordance with the terms of the Amendment following issuance of the approval order by the court.

Copyright Photo: The Embraer 170s and 175s are gradually being transferred from Shuttle America to sister airline Republic Airlines (2nd). American Eagle Airlines (2nd)-Republic Airlines (2nd) Embraer ERJ 170-200LR (ERJ 175) N137HQ (msn 17000231) CLT (Jay Selman). Image: 402600.

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American takes delivery of the first Embraer 175 to be operated by Compass Airlines

American Airlines Group (Dallas/Fort Worth) yesterday (February 11) took delivery of the first Embraer ERJ 175 (ERJ 170-200LR) (N200NN, msn 17000456) to be operated by newcomer Compass Airlines (Minneapolis/St. Paul). Compass will operate the first 20 aircraft. The remaining 40 ERJ 175s will be operated by American Airlines Group subsidiary Envoy Air (Dallas/Fort Worth).

Compass logo

Embraer issued this statement:

At a ceremony held on February 11 at the Company’s headquarters in São José dos Campos, Embraer delivered to American Airlines the first of 60 firm order E175 jets under the contract signed between the two companies in December 2013. The contract also included options for another 90 E175s, taking the total order potential to 150 aircraft.

American Airlines selected Compass Airlines, a wholly owned subsidiary of Trans States Holdings, to operate the first 20 E175 aircraft under the American Eagle brand. The E175s will be configured with 12 First Class, 20 Main Cabin Extra and 44 Main Cabin seats, for a total of 76 seats.

Copyright Photo: Brian McDonough/AirlinersGallery.com. Republic Airlines is already an Embraer ERJ 175 operator for American Eagle. Republic Airlines’ (2nd) Embraer ERJ 170-200LR (ERJ 175) N407YX (msn 17000370) completes the final approach to Washington’s Reagan National Airport.

American Eagle-Republic aircraft slide show: AG Airline Slide Show

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American Eagle Airlines to become Envoy on April 15

American Eagles Airlines (2nd) (subsidiary of American Airlines Group) (Dallas/Fort Worth), previously announced and reported on January 14, 2014, will officially changed its name to simply “Envoy”(ENY)  on April 15. The carrier will continue to operate under the American Eagle brand. The name change was destined when other carriers started adopting and operating under the American Eagle brand.

AMERICAN AIRLINES GROUP ENVOY LOGO

The current American Eagle Airlines (2nd) (becoming Envoy) was created on May 15, 1998 when Simmons Airlines was merged with Flagship Airlines and Wings West Airlines. American Eagle retained the Part 121 AOC and MQ (for the Marquette, MI base of Simmons) code of Simmons.

Metroflight (Metro Airlines) and the first airline to operate under the American Eagle name and brand.

Copyright Photo: Brian McDonough/AirlinersGallery.com. Bombardier CRJ700 (CL-600-2C10) N509AE (msn 10078) approaches the runway at Washington’s Reagan National Airport.

American Eagle-Envoy: AG Slide Show

SkyWest, Inc. reports lower fourth quarter net profit of $8.6 million and a higher net profit of $59 million for 2013

SkyWest, Inc. (SkyWest Airlines and ExpressJet Airlines) (St. George, Utah) reported net income of $8.6 million, or $0.17 per diluted share, for the quarter ended December 31, 2013, compared to net income of  $13.9 million, or $0.27 per diluted share, for the same period last year.

SkyWest also reported net income of $59.0 million, or $1.12 per diluted share, for the twelve months ended December 31, 2013, compared to $51.2 million, or $0.99 per diluted share, for the same period last year.

Quarter Summary

For each of the quarters ended March, June and September of 2013, SkyWest reported improved financial results, on a year-over-year basis, in achieving increases in its fully-diluted earnings per share.  However, SkyWest experienced a decline in its financial results for the quarter ended December 31, 2013 compared to its financial results for the quarter ended December 31, 2012. During the quarter ended December 31, 2013, compared to the quarter ended December 31, 2012, SkyWest experienced increased crew training costs as a result of new regulations regarding pilots (FAR 117) that became effective January 4, 2014 of approximately $3.0 million pretax. SkyWest also experienced increased maintenance costs of approximately $5.0 million, pretax, due primarily to performing additional C-checks related to used aircraft that were added to SkyWest’s fleet during 2013.  Additionally during the quarter ended December 31, 2013, SkyWest incurred approximately $3.0 million, pretax, of costs associated with advanced pilot training and efforts to become certified to operate the new Embraer 175 regional jets scheduled for deliveries beginning in March 2014.

For the quarter ended December 31, 2013, SkyWest generated increased operating revenues (net of fuel, certain engine overhaul, landing fee and station pass-through revenues under SkyWest’s contracts with its major partners), of approximately $23.0 million, or 3.7%, compared to the quarter ended December 31, 2012,  primarily due to additional block hour production of 2.8%  and scheduled rate escalations. The increased operating revenues were offset by increased costs in several areas that resulted in a reduced amount of operating and pre-tax income for the quarter ended December 31, 2013 compared to the quarter ended December 31, 2012.

Following are selected statistics and information from the quarter ended December 31, 2013, compared to the quarter ended December 31, 2012:

  • Pre-tax income declined to $15.1 million, compared to $25.6 million
  • Fully-diluted EPS declined to $0.17, compared to $0.27
  • Increased block hour production 2.8% to 584,594 block hours, compared to 568,808 block hours
  • Increased operating revenues by approximately $23.0 million (net of fuel, certain engine overhaul, landing fees and station pass-through revenues) primarily related to rate escalations under SkyWest’s agreements with its major partners and increased block hour production
  • Increased total aircraft fleet to 757 aircraft as of December 31, 2013, compared to 744 aircraft as ofDecember 31, 2012

Commenting on the results, Jerry C. Atkin, SkyWest’s Chairman and CEO, said, “The decrease in our earnings in the fourth quarter is primarily due to advance preparations for the implementation of FAR 117, the new flight and duty time regulations, and aging maintenance costs on the 50-seat aircraft. We also invested in our future by beginning certification work on the Embraer 175 aircraft that are scheduled for delivery beginning in the first quarter of 2014.”

Financial and Operating Results

Operating revenues totaled $804.4 million for the quarter ended December 31, 2013, compared to $810.7 million for the same period last year or a decrease of $6.3 million.  The decrease was due primarily to the reduction of approximately $29.2 million in fuel expenses, certain engine overhaul amounts, landing fees and station costs which were directly reimbursed by SkyWest’s major partners and recorded as operating revenues.  However, this reduction was mostly offset by recording $23.0 million in additional operating revenues, primarily resulting from rate escalations under SkyWest’s agreements with its major partners and a 2.8% increase in total block hours for the quarter ended December 31, 2013, compared to the quarter ended December 31, 2012.

Total airline expenses (consisting of total operating and interest expenses) increased $4.0 million, or 0.5%, during the quarter ended December 31, 2013, compared to the same period in 2012.  However, after deducting pass-through costs for fuel, certain engine overhaul expenses landing fees and station costs from total operating cost and interest expenses, the remaining total airline expenses increased $33.4 million.  Management estimates that approximately $16.9 million of the increase was due primarily to the 2.8% increase in block hour production and approximately $16.4 million was primarily due to additional maintenance costs, cost increases resulting from new pilot regulations (FAR 117) and costs incurred from certifying a new E175 aircraft type.

Under certain of its agreements with its major partners, SkyWest recognizes revenue at fixed hourly rates for mature engine maintenance on regional jet engines and recognizes engine maintenance expense on its CRJ200 regional jet engines on an as-incurred basis as maintenance expense.  During the quarter ended December 31, 2013, CRJ200 engine expense under these agreements decreased $1.0 million to$9.6 million, compared to $10.6 million for the quarter ended December 31, 2012, primarily as a result of decreased engine overhaul expense due to the timing of scheduled engine maintenance events.  SkyWest was reimbursed approximately $12.7 million and $10.3 million for engine overhaul expense, under its agreements with its major partners, during the quarters ended December 31, 2013 and 2012, respectively.

Liquidity

At December 31, 2013, SkyWest had $670.1 million in cash and marketable securities, compared to$709.4 million as of December 31, 2012.  Cash and marketable securities decreased $39.3 million during the quarter ended December 31, 2013 compared to the balance as of December 31, 2012, due primarily to SkyWest’s payment of $40.0 million (total amount required under agreement) related to deposits on its new order for E175 regional jet aircraft.  SkyWest’s long-term debt was $1.29 billion as of December 31, 2013, compared to $1.47 billion as of December 31, 2012.  The decrease in long-term debt for the twelve-months ended December 31, 2013 was due primarily to SkyWest’s payment of normal recurring debt obligations.  SkyWest has significant long-term lease obligations that are recorded as operating leases and are not reflected as liabilities on SkyWest’s consolidated balance sheets.  At a 5.8% discount rate, the present value of these lease obligations was approximately $1.5 billion as of December 31, 2013.

Business Developments

On May 21, 2013, SkyWest announced it had entered into a Capacity Purchase Agreement (CPA) with United Airlines, Inc. to operate 40 new Embraer 175 dual-class regional jet aircraft. The CPA is for 12 years and the new aircraft will be operated by SkyWest’s wholly-owned subsidiary, SkyWest Airlines, Inc. (St. George). Deliveries for these aircraft are scheduled to begin in March 2014 and continue through July 2015.

Additionally, on May 21, 2013 SkyWest announced it reached an agreement with Embraer S.A. for the purchase of 100 new E175 dual-class regional jet aircraft, 40 of which are considered firm orders and the remaining 60 aircraft remain conditional upon SkyWest entering into capacity purchase agreements with other major airlines. SkyWest intends to place the 40 new E175 aircraft into service under the terms of the United CPA discussed above.

On June 17, 2013, SkyWest and Embraer jointly announced an aircraft purchase agreement covering 100 E175-E2 dual-class regional jet aircraft and an option to purchase an additional 100 of the same aircraft.  Deliveries for these E2 aircraft are tentatively planned to start in 2020.

During 2012, SkyWest announced the award of 34 additional dual-class aircraft and the removal of 66 CRJ200 aircraft under its Delta Connection Agreements with Delta Airlines, Inc. (Atlanta).  As of May 2013, all 34 of these additional dual-class aircraft had been delivered. As of December 31, 2013 SkyWest had removed 33 (22 placed in contract with another major partner and 11 removed from SkyWest’s fleet) of the 66 CRJ200 aircraft from service and currently anticipates removing another 29 CRJ200 aircraft during 2014.  SkyWest believes the remaining four CRJ200 aircraft will be removed from its fleet in early 2015.  Additionally, 41 of the 66 CRJ200 aircraft have been financed by Delta and will be returned to Delta with no further obligation by SkyWest.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Even though SkyWest is shrinking its Bombardier CRJ200 fleet, it was fortunate to place some of the grounded CRJ200s with American Airlines as an American Eagle carrier. SkyWest’s Bombardier CRJ200 (CL-600-2B19) N864AS (msn 7502) departs the runway at Los Angeles International Airport.

American Eagle-SkyWest: AG Slide Show

Leadership of American Eagle Pilot’s Union rejects management’s recent concessionary contract proposal, is this the end of Envoy?

Envoy’s (formerly American Eagle Airlines) (subsidiary of American Airlines Group) (Dallas/Fort Worth) pilots, represented by the Airline Pilots Association (ALPA), will not be voting on the new proposed company contract any time soon. The Master Executive Council of the American Eagle Pilot’s Union, voted down the latest contract proposal by the company. The company’s proposal would have given the company pilot work rule and further pay concessions in return for new Embraer 175 regional jets to be flown by Envoy’s pilots.

Envoy’s management has made it clear that if the contract was not approved the company would be reduced and aircraft reassigned to other American Eagle carriers.  Once reduced in size, Envoy would be liquidated.

ALPA did not want its Envoy members to be flying for rates lower than other airlines and will now ask management about a timetable for liquidation. ALPA will help Envoy pilots find jobs at other carriers.

Is this the end of Envoy (like Delta’s Comair)?

Read the full story from Dallas News: CLICK HERE

Copyright Photo: Envoy’s Bombardier CRJ700 (CL-600-2C10) N507AE (msn 10059) taxies from the gate at Los Angeles International Airport.

Envoy (American Eagle Airlines): AG Slide Show

American Eagle Airlines to become Envoy, will continue to operate under the American Eagle brand

AMERICAN AIRLINES GROUP ENVOY LOGO

American Eagle Airlines, Inc. (American Eagle Airlines 2nd) (Dallas/Fort Worth), a wholly owned subsidiary of American Airlines Group Inc., announced today that the company will be changing its name to Envoy in spring 2014. This change is being made to give the company its own distinct identity and eliminate the confusion between the company’s current name and American Eagle, the regional flying brand of American Airlines, Inc. With the formation of American Airlines Group, the 10 carriers currently providing regional service for the legacy American and US Airways networks will all eventually fly under the American Eagle brand.

American Eagle Airlines has more than 14,000 employees and a growing portfolio of business outside of its flying operations, including a robust aviation ground handling operation. Envoy was chosen as the company’s new name after an extensive selection and vetting process that included looking at more than 1,000 names and considering feedback from American Eagle Airlines employees. The name was chosen because Envoy is reflective of what the company does for the airlines it works with – serving as their ambassador and a representative to their customers.

Customers traveling on both American Eagle Airlines and American Eagle-branded regional air service will not experience any changes to their travel experience as a result of this name change. Ticket counters and gates will continue to be branded American and American Eagle and Envoy’s aircraft will continue to operate using the American Eagle brand and livery. Once the necessary regulatory processes and approvals are complete, “Operated by Envoy” will be added to the company’s aircraft paint scheme and noted on customers’ tickets much like it is for American’s other regional carrier partners currently flying using the American Eagle brand.

American Eagle (2013) logo

American Eagle-Envoy: AG Slide Show

American Eagle to operate 60 Embraer 175 aircraft

American Eagle Airlines (2nd) (subsidiary of American Airlines Group) (Dallas/Fort Worth) and its pilots, represented by the Air Line Pilots Association (ALPA), have reached an agreement in principle on a new contract. According to an ALPA letter sent to its members, the union gave up contractual concessions in return for a guarantee that it will operate 60 new Embraer 175 aircraft with options for 90 additional aircraft. The pilots will also have increased flow through opportunities to American Airlines (currently restricted at 30 per month). In exchange, the Eagle pay rates will be frozen until 2018. Starting on January 1, 2018 pilots will receive a 1 percent annual increase unless the pilot has declined the flow through to American.

In other news, with this announcement, the company is also expected to unveil a new company name very shortly as other carriers are now flying under the American Eagle brand.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. American Eagle currently operates 47 Bombardier CRJ700 (CL-600-2C10) aircraft for American (+ Embraer ERJ 140s and ERJ 145s which will be retired by 2017).  Bombardier CRJ700 N535EA (msn 10313) climbs away from the runway at Los Angeles International Airport.

American Eagle: AG Slide Show