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May 21, 2014

American says no plans to combine its regional airline subsidiaries

HashimotoAmerican Airlines has no plans to combine its three regional airline subsidiaries into one even as the Fort Worth-based carrier is looking to other third-party regional operators to fly under the American Eagle brand.

"All three play a very important role in achieving regional feed that is really important for our regional customers," Kenji Hashimoto, American’s senior vice president of regional carriers, said at an event Tuesday where the airline showed off a new CRJ-900 regional jet that it will receive from Bombardier in June.

After its merger with US Airways in December, American Airlines Group now owns three regional airlines: Piedmont Airlines, PSA Airlines and Envoy Air, formerly American Eagle. The two-class CRJ-900s will be flown by its wholly owned subsidiary, PSA Airlines, under the American Eagle brand. But the carrier hasn’t disclosed which routes it will use the aircraft on.

The Star-Telegram had the opportunity to sit down for a few minutes with Hashimoto to talk about the future of regional carriers at American. Here's an excerpt from the interview

ST: On what routes will you use the CRJ-900s?

Hashimoto: We don’t know yet. We’re still working through the details of trying to find the best place to set these aircraft to meet customer demand.

ST: Will the CRJ-900s be replacing smaller planes in the PSA fleet?

Hashimoto: For PSA itself it’s going to be incremental aircraft, these are all going to be added in to what PSA has.

ST:  How do PSA, Piedmont and Envoy fit into American’s overall business plan as it integrates with merger partner, US Airways?

Hashimoto: All three are really important if you take a look at the fleet they fly and the places that they fly, it all circles back to the customer. Our customers have needs for various types of flying and when I say types of flying I mean network as far as where we fly… What we are trying to achieve is providing a service both in network but also in quality of the service that our customers will then choose American Airlines. You take a look at this plane for instance, this is sort of an embodiment of all those factors all in one place, the economics of the plane are very, very good. It allows you to economically with competitive costs fly in the markets where customer demand is there but at the same time has all the features that our customers appreciate, whether it is first class, main cabin extra or even main cabin…Customers have choices and you want to be able to fly the aircraft where thy want to fly and you want to fly it in a way with a product where they will choose American Airlines.

ST: Is there any discussion of thoughts of bringing all three wholly-owned subsidiaries into one carrier?

Hashimoto: There’s no discussion of that. US Airways had PSA and Piedmont. American had Envoy or American Eagle back then and so all three play a very important role in achieving regional feed that is really important for our customers and we see them continuing to do that.

ST: Do you seem them filling those roles at the same size they are now?

Hashimoto: PSA is obviously getting these airplanes so they’re going to change in size but Envoy is a 200 airplane operator so that is a very sizeable operation. It’s a very important operation for our regional customers.

ST: Can you discuss the progress of where American is going to place its new regional jets.

Hashimoto: I think what we’ve said is we’re having discussions of where to place the E175s and if you go back to the earnings call that is where we gave a very brief update of where that stood…those planes are coming, and we need to find an operator for them. We need to have an operator ready to go with those airplanes so that our customers can actually get on them and fly to places they want to go.

ST: Are you concerned that you will not be able to find regional carriers to operate planes because of problems they may have hiring pilots?

Hashimoto: In general terms, let me just say we’re having discussions with carriers about operating those planes. If I wanted to add a little bit to that I will say that hiring pilots is an important factor for any operator, even under normal circumstances it can be challenging but I think what we’ve found is a lot of the carriers that we do business with are able to hire the pilots that they need to serve the schedules they need and also the ones we are talking to seem comfortable they can find the pilots to staff those planes.

-Andrea Ahles

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