AMR to Divest American Eagle

After undergoing a strategic value review, AMR Corporation said it will divest itself of American Eagle, its wholly-owned regional carrier. “AMR believes that a divestiture of American Eagle is in the best interests of AMR and its shareholders and will be beneficial to American, American Eagle, their employees, and other stakeholders,” said the company in its announcement yesterday.
In 2007, American Eagle expects to generate annual revenues of approximately $2.3 billion., although regional operations has posted losses in recent quarters. The planned divestiture would include both American Eagle Airlines, Inc., which feeds American Airlines hubs throughout North America, and its affiliate, Executive Airlines, Inc., which carries the American Eagle name throughout the Bahamas and the Caribbean from bases in Miami and San Juan, Puerto Rico.
The move is not a surprise, according to BACK Aviation Solutions Analyst Tulinda Larsen. “This is probably the first of the next round of such actions,” she told Regional Aviation News. “The majors have to divest, they need the money and these airlines are operated much better on the outside.” For a complete analysis see the next issue of Regional Aviation News.