American Eagle officers presented the company’s overview of the carrier’s status to all three labor groups this morning at Flagship University. The labor groups represent a majority of American Eagles employees. The TWU, AFA and ALPA accompanied by their attorneys and economic advisors gathered in the Flagship Auditorium to hear the company’s business reorganization plan under the pre 1113 bankruptcy guidelines. After reminding the parties they had signed a binding, non-disclosure statement, the company presented their “moving forward” business plan.
CEO Dan Garton explained that Eagle must become cost competitive, re-fleet with newer more fuel efficient aircraft and engines and grow their market share to be a successful, sustainable carrier in the future. He was referring to issues within the AA bankruptcy that remain unresolved and could affect Eagles restructuring. They are:
- The TWUs contractual cap on available seat miles (ASMs)
- APAs scope clause that limits flying of certain aircraft
It was evident that the company’s business plan is based on a host of assumptions, and hinges directly on a number of uncontrollable industry variables. They want to re-fleet over the next few years and increase their competiveness and productivity to match other regional carriers Republic and Pinnacle.
The TWU work groups were meeting with the company throughout the afternoon receiving a more detailed “ask” for consensual agreements. The company did announce they are seeking $75 million annually in cost reductions from labor, including management. See the TWU bankruptcy web site for the specific work group’s term sheets.