MIAMI — American Eagle management and pilots union officials reached an agreement late last Friday that guarantees the regional carrier will receive 60 new Embraer 175 airplanes that parent company American Airlines Group (AAG) ordered in mid-December. The deal must be ratified by the rank and file pilots before taking effect. Final language is presently being worked out, after which a date will be set.
Though expected, the deal wrings out several concessions. The contract freezes pilot pay rate scales through 2018, and requires a larger out of pocket payout for health insurance starting in 2015. In return pilots will be able to move on to mainline American more quickly.
The contract also apparently resolved ongoing restrictions set in a former contract on the pilot’s ability to operate aircraft larger than the fleet of aging and inefficient 50-seat jets it currently utilizes. Eagle will be given sixty Embraer 175 aircraft starting in the first quarter of 2015. The carrier will also operate up to 90 additional aircraft should AAG chose to exercise its options.
The regional carrier, now one of three under the umbrella of American Airlines Group, was not provided an allotment of jets when the massive regional jet order was first announced. The decision prompted concerns over the long-term future of the carrier post-merger, which had been known to be facing significant financial hurdles. The apparent resolution, or at least major steps thereto, of the carriers high personnel and equipment costs will no doubt be a very positive step going forward.
Perhaps in keeping with its bigger mainline brother, the airline also recently announced intentions to change its name and logo in the near future. There were no hints or indications as to what the new identity might be.
Prior to the turn in relations, AAG (then known as AMR) twice attempted to offload Eagle, first in 2007 and then again in 2010. Its unattractive portfolio of old, uneconomic airplanes in conjunction with a slew of other demons meant buyers were hard to find. Thus, despite its best efforts, AMR wound up deciding to keep Eagle in the fold both times.
Eagle has since been forced to fight off competition from inside and out. Seeking larger aircraft, AMR began putting many Eagle routes up for bid. SkyWest won a contract to fly 50 seat CRJ200 aircraft under the Eagle brand in late 2012. Republic won a contract as well, and began flying 76 seat Embraer 175 airplanes, the same that Eagle will now fly, in September of 2013.
Since the American/US Airways merger Eagle had also been forced to compete with former US Airways regional affiliates PSA and Piedmont. In the initial regional jet order, PSA received thirty CRJ900s. Eagle and Piedmont were both left out.