Eagles Can Fly

August 16, 2011

American Airlines has announced it will be reconfiguring the financials of its regional airline American Eagle and spinning it off for a reported $1.2 billion or one years revenues.

The airline giant said it would likely take at least three months to achieve its aims.

American Eagle will become a separate company of its own with its outstanding shares owned by AMR.

AMR owns American Airlines and Eagle.

American Eagle operates 1700 flights daily in the United States and Canada.

It is the nation’s third largest regional carrier. Last year American Eagle’s revenues amounted to $1.2 billion.

American Eagle will be signing a nine-year contract to provide regional services with American Airlines, according to officials of American Airlines.

American Eagle has 12,000 employees. Industry sources believe that AE standing on its own will allow the regional powerhouse to more effectively compete for new business.

Talk about numbers

Logan Airport served over 27 million passengers last year – an enormous and impressive number by any standard of measure.

When those numbers are broken down, they come to this : 2.3 million passengers a month ; about 80,000 passengers a day ; and about 3,300 passengers an hour.

Not bad.

But when compared with London’s giant Heathrow Airport … well, you be the judge.

Heathrow officials recently announced that during July, the airport served 6.9 million passengers or nearly 10,000 passengers an hour.

In additon, Heathrow officials said that full year 2011 passenger figures would come in at approximately 85 million passengers.

Logan’s passenger figures have been up more than 3% nearly all of this year.

At Heathrow, officials said overall passenger figures are up 2.5% this year over those from last year during the same period.

The way of the world

There was a time and it was not so long ago when being a pilot for a major airline implied a huge salary, not too many hours of work and lifetime employment.

A study recently conducted the British equivalent of the FAA – the CAA – Civil Aviation Authority reveals that younger, cheaper staff are helping airlines to bring down average costs of salaries, which have dropped dramatically since the downturn in the aviation industry in 2008-2009.

The decline in pay at two major British operators with significant operations out of Logan International-British Airways and Virgin Atlantic was a part of cost reduction strategy implemented by many airlines during the fight to survive and to remain competitive during the recession and because of the much higher costs for jet fuel.

The CAA looked closely into the pay scales at both airlines and found this : the average pay for a BA pilot fell by about $2800 to $146,000 while Virgin Atlantic’s pilots received $8400 less to $117,600.

Pay also fell for cabin crew an average of 5 .5% at both airlines.

A new recruitment strategy implemented at both airlines offers lower salaries to those just starting out.

Virgin officials claims the salaries aren’t lower, rather, they claim to have a different mix of ranks and therefore a change in salary levels.

Anyway one chooses to look at it, there is a new reality powering great airlines who are attempting to deal with the difficulties of operating with excessively high fuel prices are gradually rising numbers of passengers.