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American Eagle Could Still Be Spinoff Target After Merger

CEO Says New Aircraft Fleet Plan Is A 'Priority'

The CEO of American Eagle says that a fleet of new regional aircraft is a top priority for the regional carrier that he knows is still a spinoff target should American and US Airways complete a planned merger.

While most mainline carriers have pushed their feeder business to stand-alone commuter airlines such as Republic Airways Holdings or Sky West, American Eagle is still owned by American, and is the largest regional airline still owned by a U.S. Network airline. American Eagle accounts for 95 percent of the passengers being fed onto the mainline carrier's flights through commuter airlines.

The Wall Street Journal reports that, under the terms of the merger, US Airways' commuter carriers PSA Airlines and US Airways Express would initially remain as separate entities, but all regional flying would eventually come under the American Eagle brand. American Eagle CEO Dan Garton said that a spinoff of American Eagle is still possible, but "down the road." While he has long been a proponent of severing the regional carrier from the larger American, he said that his top priority now is to move away from the 37-50 seat jets to larger models.

Garton said that there are "way too many" of the smaller, less efficient jets flying for American Eagle at this time, and they are losing money flying them on many routes. The carrier's contract with its pilots' union already allows them to fly airplanes with up to 76 seats.

FMI: www.aa.com


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