Tag Archives: united states bankruptcy court

American Eagle’s pilots file an objection to the American-Republic CPA agreement in the bankruptcy court

American Eagle Airlines‘ (2nd) (Dallas/Fort Worth) pilots are represented by the Air Line Pilots Association, Int’l. (ALPA). The union has filed a formal objection to the capacity purchase agreement (CPA) recently announced between American Airlines (Dallas/Fort Worth) and Republic Airways Holdings (Indianapolis). 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 Tony Gutierrez, chairman of the Eagle unit of ALPA. “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 ERJ 175 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.

Copyright Photo: Jay Selman. Embraer ERJ 140LR (EMB-145LR) N825AE (msn 145589) climbs away from Charlotte.

American Eagle: AG Slide Show

Unsecured creditors give American until December 27 to work out their own reorganization plan

American Airlines (Dallas/Fort Worth)’ unsecured creditors are giving AMR some space and time to work out their own reorganization plan. This time period will keep US Airways (Phoenix) away (for now) if the bankruptcy court grants this motion to AMR management.

The company has issued this short statement:

“AMR Corporation, the parent company of American Airlines, yesterday (June 29) announced that the Company and the Official Committee of Unsecured Creditors (UCC) have agreed to jointly request that the United States Bankruptcy Court for the Southern District of New York extend exclusivity for AMR to file its Plan of Reorganization to December 27, 2012.”

US Airways and the unions have not yet commented on this statement. Stay tuned.

Copyright Photo: Luimer Cordero.

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