Eagle Pilots File Court Objection to American–Republic Purchase Agreement

  Eagle Pilots File Court Objection to American–Republic Purchase Agreement

Business Wire

NEW YORK -- February 7, 2013

Today the Air Line Pilots Association, Int’l. (ALPA), the union that
represents the American Eagle pilots, filed a formal objection to the capacity
purchase agreement recently announced between American Airlines and Republic
Airways. 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 E175 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.

Founded in 1931, ALPA is the world’s largest pilot union, representing more
than 53,000 pilots at 37 airlines in the United States and Canada. Visit the
ALPA website at www.alpa.org.

Contact:

Air Line Pilots Association, Int’l. (ALPA)
Dave Ryter, 703-481-4440
dave.ryter@alpa.org