Envoy Air (formerly American Eagle Airlines 2nd) (part of American Airlines Group) (Dallas/Fort Worth) continues to shrink its Embraer ERJ 145 operations as its parent continues to replace its flying with larger aircraft from other associated AE carriers..
Pedro Fábregas, President and CEO of Envoy, has informed its employees that the parent American Airlines Group has decided to phase down and finally close the Miami pilot and flight attendant base in April 2015.
According to the memo, with the December 18 schedule, Envoy will operate 37 daily departures from Miami International Airport (MIA), using 12 50-seat Embraer ERJ 145 (EMB-145) regional jets. This is a big drop off from the 60 flights operated at the hub on October 1, 2014 with its 23 ERJs. The ERJ 145 aircraft and crews that will no longer be needed in MIA will be assigned to replace Envoy operations in other locations for the planned retirement of the 44-seat ERJ 140 (EMB-140) aircraft.
No Envoy pilots or flight attendants will be furloughed as a result of the schedule change.
Envoy is phasing out its pilot and flight attendant base in MIA. This will begin in January 2015 and will be completed by April 2015.
Republic Airlines will replace the smaller Envoy ERJ 145s with its newer and larger Embraer ERJ 175s.
Copyright Photo: Ton Jochems/AirlinersGallery.com. Envoy Air’s Embraer ERJ 145LR (EMB-145LR) N697AB (msn 14500875) taxies to the runway at the Chicago O’Hare hub.
American Airlines Group (Dallas/Fort Worth) has decided to transfer all 47 Bombardier CRJ700s (and the associated flying) from subsidiary Envoy Air (formerly American Eagle Airlines) (Dallas/Fort Worth) to subsidiary PSA Airlines (2nd) (Dayton). This will leave Envoy Air as an Embraer ERJ operator. AAG is likely to continue phasing out its smaller regional jets. The pilots of Envoy Air and the AAG failed to agreed on a new contract. Will Envoy Air follow the same path as Delta’s Comair?
Bill Sprague, representing the Envoy Air pilots, issued this statement to its member pilots:
The MEC is outraged by this announcement by AAG that all 47 of our CRJ700 aircraft will be transferred to PSA. This action obviously and significantly punishes Envoy pilots for refusing to accept the additional concessions demanded by the company in exchange for larger aircraft. We are not aware of any plans to bring additional aircraft to Envoy. Therefore the company’s recent commitment to keep 200 aircraft on the property for the foreseeable future is no more credible than their promise to re-fleet Envoy as part of the bankruptcy contract.
We are evaluating the details related to the transfer of these aircraft to PSA. This action will eliminate the highest levels of compensation available under our contract.
Once again, we find ourselves wondering what the future holds for our carrier. The company has already announced their intention to park the remaining Embraer 140s. Barring any additional aircraft, we will only be operating a fleet of 118 Embraer 145s. This would require roughly 48% fewer pilots than are active on our seniority list today. We will provide you the company’s draw down schedule when they provide it to us.
The company has indicated that moving these aircraft to PSA is necessary to more efficiently focus operations on a single aircraft type. In reality, management’s decision clearly exploits the lower costs afforded by the 10 year agreement ratified last fall by our colleagues at PSA.
We understand this is a very stressful time for all of us. Many of you have inquired about the status of our previously advertised career progression resources. The MEC will receive a briefing next Tuesday, the 9th, from ALPA National regarding the rollout of these resources, and details will be communicated as we get them.
Copyright Photo: Ken Petersen/AirlinersGallery.com. Bombardier CRJ700 (CL-600-2C10) N543EA (msn 10323) departs from the runway at New York’s LaGuardia Airport (LGA).
American Eagle Airlines, Inc. (2nd) (Dallas/Fort Worth) yesterday (April 15) officially changed its name to Envoy Air, Inc.
Envoy Air Inc. is a wholly owned subsidiary of American Airlines Group (Dallas/Fort Worth) operating more than the 220 aircraft on about 1,300 daily flights to more than 170 destinations. The company’s more than 14,000 employees provide regional flight service to American Airlines under the American Eagle brand and livery and ground handling services for approximately 15 airlines, including American.
The company was founded in 1998 as American Eagle Airlines, Inc. following the merger of several smaller regional carriers to create one the largest regional airlines in the world. Envoy is headquartered in Fort Worth, Texas with hubs in New York, Chicago O’Hare, Miami, Dallas/Fort Worth and Los Angeles. On April 15, 2014 the company changed its name to Envoy Air, Inc to distinguish the company for the American Eagle brand, under which several carriers operate regional flight service for American.
The carrier currently operates 47 Bombardier CRJ700s (CL-600-2C10s), 58 Embraer ERJ 140s and 118 Embraer ERJ 145s.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. Bombardier CRJ700 (CL-600-2C10) N511AE (msn 10107) of Envoy Air departs from Los Angeles International Airport.
American Eagle Airlines’ (Envoy) (subsidiary of the American Airlines Group) (Dallas/Fort Worth) pilots, represented by the Air Line Pilots Association (ALPA), have rejected by a 70-30 percent margin the “concessionary contract”. ALPA issued this statement:
American Eagle pilots, represented by the Air Line Pilots Association, Int’l (ALPA) expressed their collective will and on March 28 rejected a concessionary contract proposed by American Airlines Group (AAG). With 92 percent of the eligible pilots casting their ballots, 70 percent voted against ratification of the contract.
“The Eagle pilots made a clear choice today, and it was not an easy one,” said Capt. Bill Sprague, chairman of the Eagle ALPA Master Executive Council. “Despite threats from AAG management that they would seek other express carriers to conduct our flying, today’s vote demonstrates that the demands for contract concessions were not acceptable. Today’s vote clearly shows that pilots can, and will, vote against any agreement that is not in their best interests.”
The proposed contract changes were a combination of pay freezes, reductions in per diem, and increased health-care costs in exchange for a promise to refleet the airline and enhance the existing agreement to transfer pilots to American Airlines. These concessions were in addition to the $43 million the pilots gave the company during bankruptcy last year.
Having previously worked under a 16-year contract that concluded with AMR’s bankruptcy filing, the American Eagle pilots have not seen meaningful contractual gains since 2004. New-hire pilot pay begins at less than $23,000 per year. Had the contract been approved, first officers would have been capped at about $38,000 per year after four years of service.
“Management has said many times to us that this agreement is their ‘bottom line’ offer and believe that they will be able to get the same cost savings from another provider,” Sprague said. “We question whether any regional airline is able to attract and retain pilots by offering poverty-level wages. American Eagle already has a career progression arrangement with American, and yet, due to a lack of pilots, it’s unable to perform the regional flying that American Airlines desires. Other airlines are experiencing the same problem.”
According to Reuters, American Eagle (Envoy) will shrink.
Copyright Photo: TMK Photography/AirlinersGallery.com. Will American Eagle Airlines (soon to be Envoy) go the same way as Comair? CEO Doug Parker, with the looming pilot shortage, now has a difficult decision to make as the pilot unions and members are drawing a line on wages and benefits concessions. The next move is from AAG management. The likely outcome is to gradually downsize Envoy and move large regional jet operations to other American Eagle carriers and gradually phase out the 50-seat ERJs currently operated by American Eagle. Bombardier CRJ700 (CL-600-2C10) N536EA (msn 10315) of American Eagle (Envoy) arrives at Toronto (Pearson).
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.
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.
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.
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.
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.
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.
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.
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 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 Airlines (2nd) (Dallas/Fort Worth) is a subsidiary of the new American Airlines Group (Dallas/Fort Worth). In a lot of ways the regional jet carrier is now the step-child of the Group and fighting for its future. The current American Eagle (not the brand that several carriers are now flying under) was created on May 15, 1998 as a consolidation of four AMR-owned regional carriers, namely Simmons Airlines, Executive Airlines (3rd), Flagship Airlines and Wings West Airlines. The pilots of the carriers signed a single contract in August 1998 creating the large feeder airline for parent American Airlines. American Eagle used the AOC of Simmons Airlines. The MQ code of Simmons has been retained.
American Eagle has had an important role in the history of American Airlines. Today it is fighting for new contracts and its life.
The Air Line Pilots Association (ALPA) represents the present-day pilots of American Eagle Airlines. The new management team of the American Airlines Group are demanding a new (lower benefits) contract with the pilots to bring their contract in line with the new American Group regional model, i.e. PSA Airlines, which will be flying a new batch of regional aircraft for American as a new American Eagle carrier.
The pilots of American Eagle Airlines are now facing a difficult decision, accept the new contract which cuts benefits or gradually see its fleet dissolve and be transferred to the other lower cost American Eagle units like PSA Airlines (Dayton).
Will the original American Eagle follow the same path of Delta Air Lines’ Comair and go out of business?
Terry Maxon of the Dallas News explores this interesting and important question in his excellent column. The column includes union messages on the subject.