Sept. 13--AMR Corp. is starting to change the way it operates now that the Bankruptcy Court has approved new contracts with American Airlines flight attendants and mechanics.
On Wednesday, the Fort Worth-based carrier said it has contracted with regional carrier SkyWest to fly 23 regional jets under the American Eagle brand name.
The 50-seat Bombardier CRJ-200s will operate from Los Angeles starting in November and from Dallas/Fort Worth Airport in February.
The move is the first of several changes that American is expected to make this fall now that it has new labor agreements with its unions and the authority to reject an existing contract with pilots, who turned down a new deal.
The carrier recently set a time frame for closing its Alliance Fort Worth maintenance base by the end of the year as it outsources work.
American can hire other regional carriers to handle some flights because it will change provisions of its contract with pilots.
The old contract had limited domestic flying by other carriers through code sharing or regional operating agreements.
Under the four-year agreement, SkyWest Airlines will fly 12 planes out of Los Angeles while ExpressJet Airlines, which it bought in 2010, will fly the 11 others out of DFW.
The jets are part of SkyWest's fleet and have been used previously by another carrier.
"We look forward to operating under the American Eagle designation and establishing ourselves as a trusted and valuable long-term partner for American," SkyWest President Bradford Rich said.
As part of its restructuring, American has indicated that it wants to use more third-party carriers for regional flying.
By bidding out the flying, American can use providers that cost less than American Eagle.
Before filing for bankruptcy, AMR had said it wanted to spin off its regional carrier, American Eagle, partly to lower its costs of regional flying.
In a letter to employees, American Eagle Chief Executive Dan Garton said Eagle will continue to provide regional service with the CRJ-700 out of Los Angeles, using flight crews from Chicago.
It plans to close its pilots and flight attendants bases in Los Angeles.
With the changes at Los Angeles and DFW, Garton said, he does not expect any furloughs and will offer positions throughout the system to affected employees.
A different Eagle starts to emerge
American Eagle, the regional carrier owned and operated by AMR since the late 1980s, may even lose its name as the company restructures.
So far, AMR has chosen to use the American Eagle brand for all its regional flying, including flights operated by SkyWest.
It will gradually phase out the American Connection name used by Chautauqua Airlines on 50 daily flights out of Chicago O'Hare Airport.
"Although we all share a pride with the American Eagle name, the name and the brand belong to AMR, and it is not surprising that American would want to have a consistent brand for all of its regional flying -- just as all other mainlines have one brand for their regional partners," Garton said.
"So, for now, we will continue to be American Eagle Airlines, but over the coming months, we will be looking into creating a new name and identity for our company and our people."
Garton said American Eagle will begin recalling all its furloughed pilots and expects to hire pilots.
The carrier is hiring flight attendants, mechanics and ground employees.
Even though American is moving regional flights to other carriers, Eagle thinks it will need more pilots as some transfer to American and tougher government pilot rest rules are implemented in two years.
The chairman of American Eagle's pilots union called Wednesday a "bad day for all of us" after the announcement that the carrier will close its Los Angeles hub.
In a message sent to Eagle pilots, Tony Gutierrez, who chairs the Air Line Pilots Association master executive council, said he expects American to sign more regional flying contracts as it restructures.
"Since last year's divestiture negotiations, we have known that AMR was determined to diversify its regional feed.
"But knowing this doesn't begin to lessen the emotion of seeing it come to fruition. LAX is one of our most senior domiciles. Dozens of pilots make their home in southern California and will now be forced to uproot their families and relocate, or commute for what could be the remainder of their careers," Gutierrez wrote.
The executive council for the association's Eagle group decided Wednesday to send out a tentative agreement for a ratification vote.
The association represents about 3,000 Eagle pilots.
American spokesman Bruce Hicks said the ratification vote will occur within weeks.
"This agreement represents another significant step forward in the successful restructuring of our company," Hicks said.
Court approval
In New York on Wednesday, American received court approval for labor agreements with its flight attendants, mechanics and store clerks.
The six-year contracts were approved by U.S. Bankruptcy Judge Sean Lane in Manhattan, who said "labor peace" is valuable to the bankrupt airline, Bloomberg News reported.
"This is a very wise thing to do to resolve the dispute in this way," Lane said.
The deals, ratified last month by the Association of Professional Flight Attendants and the Transport Workers Union, include pay raises but also job reductions and work rule changes that will trim costs for the carrier.
"With the court's approval, we will now begin to put in place the new contracts we reached through consensual agreements with the APFA and TWU," American's chief executive, Tom Horton, told employees in a letter Wednesday afternoon.
"We have made great progress reducing debt and renegotiating leases and contracts, and now these new agreements -- combined with the changes across the rest of our team -- will make a huge difference in making us more competitive."
Horton said the airline is still working on how to phase in work rule changes included in the new contracts and added that American is committed to reaching a consensual agreement with pilots.
"I also understand that there are many different views and feelings about the past, and I hope that over the coming weeks, months and years, we can forge a new basis for mutual respect and trust, and a new beginning," Horton said.
This report includes material from Bloomberg News.
Andrea Ahles, 817-390-7631
Twitter: @Sky_Talk
Copyright 2012 - Fort Worth Star-Telegram
