American Air signs deal to outsource some flying

Associated Press Modified: September 12, 2012 at 6:45 pm •  Published: September 12, 2012
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DALLAS (AP) — American Airlines has agreed to outsource some of its regional flying to SkyWest Inc., part of American's plan to cut costs while it's under bankruptcy protection.

SkyWest will handle some flying currently performed by American Eagle, American's regional affiliate, in Los Angeles and Dallas. SkyWest's shares rose almost 5 percent in Wednesday trading.

The president of the Eagle pilots' union called it "a bad day for all of us" and a betrayal by parent company AMR Corp.

Under the four-year deal announced Wednesday, SkyWest and its ExpressJet subsidiary will operate 23 50-seat Bombardier regional jets under the American Eagle banner. The changes will begin Nov. 15 and be complete by spring.

American Eagle will close its pilot and flight-attendant bases at Los Angeles International Airport, although Chicago-based crews will continue to operate some flights using larger, 65-seat jets. Eagle also flies in and out of Miami, New York and Chicago.

Eagle CEO Daniel Garton said employees in Los Angeles will be offered positions elsewhere and that he doesn't expect the moves to result in furloughs.

The changes were made possible last week, when a federal bankruptcy judge threw out the union contract of American Airlines pilots. That contract limited AMR's ability to hire other carriers for regional flying, which most other major airlines have already done.

Regional airlines use smaller planes to feed passengers from smaller cities to hub airports where they can catch flights on the big airlines. Skywest operates United Express, Delta Connection and US Airways Express flights.

Garton said hiring SkyWest would diversify American's regional feed and help it come out of bankruptcy as a stronger airline.

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