American Nears Accord on Eagle Flying Contract, Pilots Say

American Airlines parent AMR Corp. (AMR) is close to an agreement on regional flying that would be provided by American Eagle as a stand-alone carrier, Eagle’s pilot union said.

The Air Line Pilots Association at Eagle also said it’s told AMR about concerns that the smaller airline won’t be able to employ enough pilots for the proposed business plan, according to a member update posted on the union’s website.

AMR, based in Fort Worth, Texas, has been studying for almost a year whether to separate American Eagle through a spinoff, public offering of stock, or a sale. AMR wants Eagle to compete for the business of ferrying passengers from smaller cities to hub airports operated by American, the third-biggest U.S. carrier.

“It is our understanding that management is nearing completion in their negotiations over a potential air-services agreement between Eagle and AMR, and we expect to be briefed on AMR’s version of this document next week,” the notice said.

The message didn’t provide specifics about why union leaders were concerned about pilot staffing at Eagle.

Dan Garton, Eagle chief executive officer, told employees last month that a decision to divest Eagle may be the best option for the airline’s future success.

Eagle’s traffic, or miles flown by paying passengers, rose 17 percent in May from a year earlier, the carrier said today in a statement. Traffic climbed 16 percent for the year through May.

To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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