Divestiture Meetings
Your AFA MEC has met with the ALPA MEC and the
Company to get more insight to the possible
divestiture of American Eagle.
We met with the ALPA MEC representatives first.
The ALPA MEC and AFA MEC stand united. This
divestiture has to be a win-win for the
hard-working Eagle Employees. The timing of this
divestiture comes at a critical point for ALPA’s
contract negotiations. ALPA’s concern is that
the Air Service Agreement (ASA) may become a 5
year contract which would expire the same time
that the ALPA contract expires and is concurrent
with the expiration of both Trans States and
Chautauqua’s ASA expirations. This would give
AMR the ability to pit each of the above
airlines to compete and lower current pay
scales.
After the meeting with ALPA, we met with Peter
Bowler, Linda Kunz and Jon Snook. The following
is the information we were given from the
company:
· Terms of Air Service and Ground Service
are being compiled. Peter said it may take years
to complete the divestiture, depending on the
state of the airline industry in the future.
· The Company is working with Merck to
keep our insurance benefits and rates as they
are now.
· The Company will soon put out details
on Non-Rev travel with AA.
· If there is a spin-off of the Company,
going public with Eagle stock, it could take
place in the 2nd half of 2008.
· Peter believes Eagle can survive and
grow without being owned by AMR.
The Air Service Agreement (ASA) is the agreement
between AA and Eagle that covers the terms of
how we will provide feed/service to AA.
Currently this agreement is renewed annually.
Peter Bowler says that these terms will be
renegotiated for a longer period (longer than
the current year to year agreement) following a
divestiture.
When AMR no longer owns Eagle, the ASA will
contain the restrictions set forth in the APA
Scope Agreement, which limits Eagle’s flying
from hub to hub and spoke to spoke. This will
change our current flying structure drastically,
requiring shifts in flying at our bases. Peter
said Eagle will begin flying new markets once
this goes into effect.
Given this restriction of flying because of the
APA Scope Agreement, we asked Peter how Eagle
will grow. He stated that our ability to grow
will be based upon our contracts with other
airlines. We will only be able to secure those
contracts if we are cost-competitive.
We asked if the sale was a spin off, what would
be the ramifications. Peter responded that if a
spin-off occurred, AMR stock would be split into
two parts. AMR Eagle stocks would be sold
separately from AMR AA stocks.
We inquired about who owns the aircraft we
currently fly. Peter stated that the aircraft
are owned by Eagle and Eagle Holdings. AMR is
the guarantor for the debt on the airplanes.
Your AFA leaders remain very guarded about any
possible divestiture. We are working on setting
up more meetings with the ALPA MEC and we will
keep communications with the Company flowing. As
we get more information, we will of course pass
it along to you. |
