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October 09, 2012

American Eagle CEO: carrier still searching for a new name but progress made in restructuring

American Eagle is still searching for a new name but chief executive Dan Garton said the regional carrier has made significant progress in its restructuring plan.

With its pilots approving a new contract and the carrier reaching a tentative agreement with its dispatchers on Monday, American Eagle now has all of its union groups working under new ratified contracts or voting on tentative agreements. Mechanics, ground school instructors and dispatchers will wrap up voting by October 19.

And although the carrier is closing its Los Angeles crew base as American Airlines is shifting some of its regional flying to SkyWest Airlines, Garton said American Eagle is hiring employees in every work group including 1,500 managers, ground crew and customer service agents to handle ground service contracts it has won in the past few months.

He added the regional carrier’s goal of $75 million in annual cost cuts is within reach as the labor contracts are implemented.

“We will get to that number,” Garton said in an interview with the Star-Telegram on Tuesday. Here are excerpts from that conversation.

ST: Do you need to lay off any employees with the new labor contracts?

Garton: We’re actually hiring in every work group. There are locations where there is a need to reduce resources like Los Angeles so we don’t need as many pilots or flight attendants based in Los Angeles. But we have simultaneously a help wanted sign for flight attendants and pilots. So we aren’t in a true layoff situation. [For those affected by reductions] at least we are able to offer employment to everyone who is on staff today.

ST: With AMR deciding to use the American Eagle brand for all of American Airlines’ regional flying, have you made any progress with finding a new name for the carrier?

Garton: We are going to need, sooner or later, to find a new title for the company because we don’t want to have the same title that American Airlines uses as a brand for its feed...We are working through a more disciplined process now with some professionals to come up with a name which I expect we will be announcing toward the end of this year or early next year.

ST: Has AMR reconsidered divesting American Eagle during the bankruptcy process?

Garton: It hasn’t been ruled out but I think it is generally felt that it would be like adding three twists to a two-and-half reverse dive off a ten meter platform. While it can be done, it just adds a degree of difficulty we really don’t need right now. So the plan I would say is to still fix Eagle as we have been doing, sort out the regional fleet of the future, emerge from bankruptcy and then quickly evaluate whether we should relaunch the divestiture or not.

ST: How important was it to have the pilots ratify their tentative agreement?

Garton: It adds to the momentum I think because now more than half of our employees have ratified contracts. I think you can almost see a little bit of a tipping point...More than half of our $75 million comes from adjustments in the pilots contract so it is significant in many ways.

ST: Can you talk about some of the ground handling contracts that American Eagle has recently been awarded?

Garton: When the divestiture was halted last year there also went our ability to really pursue flying for other airlines but we could still pursue ground handling contracts....We have been pretty successful in growing that business so that by the end of this year Eagle will handle 1500 flights a day for Eagle. We’ll handle 400 flights a day for other airlines and 200 flights a day for American. And by handle I mean we do the whole thing or everything below the wing or at the ticket counter....so that is a lot of growth for us.

-Andrea Ahles

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