American to outsource at O'Hare
American to outsource at O'Hare
Pilots at Eagle unit rankled by decision to use contract carrier
By Julie Johnsson
By Julie Johnsson Tribune staff reporter
February 21, 2010
http://www.chicagotribune.com/business/ct-biz-0221-american-,0,4538026.story
American Airlines plans for the first time to outsource flights at O'Hare International Airport as it bolsters its summer schedule, the Tribune has learned.
The move is angering pilots of the airline and its American Eagle subsidiary, and is part of a broader reshaping of O'Hare operations that is causing passenger traffic and revenue to sharply decline.
Operating under the American Connection brand and subcontracted to regional carrier Chautauqua Airlines, the new flights will carry American customers to 15 cities scattered between Oklahoma City and Cincinnati.
American Eagle pilots have filed a grievance challenging the move, which they contend isn't allowed under their contract. But American disagrees and is pushing ahead.
The network change is part of an initiative the carrier unveiled last fall to rebuild traffic at O'Hare and four other hubs, while cutting unprofitable service in markets like St. Louis and Raleigh- Durham, N.C.
American will add far more flights at O'Hare than any other stronghold by this summer, a 13 percent increase year over year. But almost all of the gains will go to regional jets flown by American Eagle and Chautauqua rather than American's far larger Boeing and McDonnell-Douglas aircraft.
It's not just American's jets that are being downsized. Pilots see their career prospects diminishing as airlines increasingly deploy smaller jets on routes of 1,000 miles or less, with flying increasingly outsourced to regional carriers whose costs are lower because, in part, they pay pilots less than traditional airlines.
"Every American Airlines pilot in Chicago has a very clear memory of the routes they used to fly that are being handled by an affiliated regional carrier," said Dennis Tajer, an MD-80 first officer who is a spokesman for American's pilots union.
American is making Chicago the largest base for its newest and largest regional jets, 70-seat Bombardier CRJ700s. The Texas-based carrier is transferring some of the jets to O'Hare from its Dallas home hub, and the 22 new jets it is buying from Bombardier will be based in Chicago when they start arriving from the factory this summer.
With the changes, Chicago will overtake Dallas-Fort Worth as the largest base for American's regional jets. It's a reminder of O'Hare's changing profile, as flights on small planes now outnumber those on Boeing and Airbus planes. American and United are reducing capacity by flying smaller planes. The idea is that a lower passenger volume leads to higher airfares.
The trend is resulting in a drop in passenger volume that is straining the airport's finances. The city of Chicago is projecting that O'Hare will see 20 million fewer passengers in 2010 than it did in 2006, contributing to a steep drop in parking and concessions revenues.
American said geography, not airport costs, swayed it to bulk up its regional-jet use at O'Hare, where it will add about 70 daily flights on the smaller planes by the summer.
O'Hare will gain much of the flying that American previously handled from St. Louis, a hub it inherited with its 2001 purchase of Trans World Airlines. That includes the contract with Chautauqua, which will enable American to serve markets that wouldn't otherwise be profitable, the company said.
"There are a lot of communities surrounding Chicago that are small and midsized," said American spokeswoman Andrea Huguely. "It is more cost-effective to serve those communities with smaller aircraft."
The trend, playing out nationwide, is also at the center of a debate over airline safety and pilot training that was sparked by the Colgan Air crash in Buffalo last year that killed 50 people. The issues are front-of-mind for many passengers after they were explored recently by PBS' " Frontline" program.
Almost all of American's regional flying is done by its Eagle subsidiary, whose pilots are employed by American parent AMR Corp. By contrast, United Airlines outsources all of the flying on its smaller jets to a half-dozen regional carriers.
Longtime American customer William Baker is among travelers confused by the contractual flying arrangements.
"I always believed they were all very low-paid contractors," said Baker, who generally avoids smaller planes but flew American Eagle last fall after it took over all of American's flights to Detroit.
"I wasn't happy going in, wasn't happy with the experience," said Baker. He prefers MD-80s because they have first-class seating and roomier luggage compartments. "I'm used to getting upgraded, having larger seats."
Most passengers don't realize there's a wide discrepancy in the training and experience of pilots within the regional sector, said American Eagle Capt. Dave Ryter.
"When someone says 'regional carrier,' everyone thinks young pilots and turboprops," said Ryter, who is second in command of American Eagle's pilots union. But Eagle captains have flown with the carrier an average of 14 years, he noted. "That is higher than at some major carriers."
American Eagle has grown rapidly over the past decade, contributing about $3 billion annually to American and operating about 1,700 flights per day. But its pilots, among the highest paid in the regional sector, are affected by the same economic forces that are stunting careers at American.
After two years of flying, Eagle pilots are eligible to enter a training class at American. But more than 500 Eagle pilots who are positioned to move to American are stuck at the regional affiliate because the nation's second-largest carrier hasn't hired pilots since 2001, Ryter said.
Indeed, American Airlines employs about 900 fewer pilots at O'Hare than in 2002 as a result of cuts to mainline service, said Tajer, spokesman for the Allied Pilots Association.
That career stagnation has pilots across the company nervous about the decision to hang on to the Chautauqua contract.
"We're in a frustrating situation where there should be a loyalty that American Airlines has to Eagle," Ryter said. "But more than once, we've seen American's loyalty to the dollar."
jjohnsson@tribune.com
Pilots at Eagle unit rankled by decision to use contract carrier
By Julie Johnsson
By Julie Johnsson Tribune staff reporter
February 21, 2010
http://www.chicagotribune.com/business/ct-biz-0221-american-,0,4538026.story
American Airlines plans for the first time to outsource flights at O'Hare International Airport as it bolsters its summer schedule, the Tribune has learned.
The move is angering pilots of the airline and its American Eagle subsidiary, and is part of a broader reshaping of O'Hare operations that is causing passenger traffic and revenue to sharply decline.
Operating under the American Connection brand and subcontracted to regional carrier Chautauqua Airlines, the new flights will carry American customers to 15 cities scattered between Oklahoma City and Cincinnati.
American Eagle pilots have filed a grievance challenging the move, which they contend isn't allowed under their contract. But American disagrees and is pushing ahead.
The network change is part of an initiative the carrier unveiled last fall to rebuild traffic at O'Hare and four other hubs, while cutting unprofitable service in markets like St. Louis and Raleigh- Durham, N.C.
American will add far more flights at O'Hare than any other stronghold by this summer, a 13 percent increase year over year. But almost all of the gains will go to regional jets flown by American Eagle and Chautauqua rather than American's far larger Boeing and McDonnell-Douglas aircraft.
It's not just American's jets that are being downsized. Pilots see their career prospects diminishing as airlines increasingly deploy smaller jets on routes of 1,000 miles or less, with flying increasingly outsourced to regional carriers whose costs are lower because, in part, they pay pilots less than traditional airlines.
"Every American Airlines pilot in Chicago has a very clear memory of the routes they used to fly that are being handled by an affiliated regional carrier," said Dennis Tajer, an MD-80 first officer who is a spokesman for American's pilots union.
American is making Chicago the largest base for its newest and largest regional jets, 70-seat Bombardier CRJ700s. The Texas-based carrier is transferring some of the jets to O'Hare from its Dallas home hub, and the 22 new jets it is buying from Bombardier will be based in Chicago when they start arriving from the factory this summer.
With the changes, Chicago will overtake Dallas-Fort Worth as the largest base for American's regional jets. It's a reminder of O'Hare's changing profile, as flights on small planes now outnumber those on Boeing and Airbus planes. American and United are reducing capacity by flying smaller planes. The idea is that a lower passenger volume leads to higher airfares.
The trend is resulting in a drop in passenger volume that is straining the airport's finances. The city of Chicago is projecting that O'Hare will see 20 million fewer passengers in 2010 than it did in 2006, contributing to a steep drop in parking and concessions revenues.
American said geography, not airport costs, swayed it to bulk up its regional-jet use at O'Hare, where it will add about 70 daily flights on the smaller planes by the summer.
O'Hare will gain much of the flying that American previously handled from St. Louis, a hub it inherited with its 2001 purchase of Trans World Airlines. That includes the contract with Chautauqua, which will enable American to serve markets that wouldn't otherwise be profitable, the company said.
"There are a lot of communities surrounding Chicago that are small and midsized," said American spokeswoman Andrea Huguely. "It is more cost-effective to serve those communities with smaller aircraft."
The trend, playing out nationwide, is also at the center of a debate over airline safety and pilot training that was sparked by the Colgan Air crash in Buffalo last year that killed 50 people. The issues are front-of-mind for many passengers after they were explored recently by PBS' " Frontline" program.
Almost all of American's regional flying is done by its Eagle subsidiary, whose pilots are employed by American parent AMR Corp. By contrast, United Airlines outsources all of the flying on its smaller jets to a half-dozen regional carriers.
Longtime American customer William Baker is among travelers confused by the contractual flying arrangements.
"I always believed they were all very low-paid contractors," said Baker, who generally avoids smaller planes but flew American Eagle last fall after it took over all of American's flights to Detroit.
"I wasn't happy going in, wasn't happy with the experience," said Baker. He prefers MD-80s because they have first-class seating and roomier luggage compartments. "I'm used to getting upgraded, having larger seats."
Most passengers don't realize there's a wide discrepancy in the training and experience of pilots within the regional sector, said American Eagle Capt. Dave Ryter.
"When someone says 'regional carrier,' everyone thinks young pilots and turboprops," said Ryter, who is second in command of American Eagle's pilots union. But Eagle captains have flown with the carrier an average of 14 years, he noted. "That is higher than at some major carriers."
American Eagle has grown rapidly over the past decade, contributing about $3 billion annually to American and operating about 1,700 flights per day. But its pilots, among the highest paid in the regional sector, are affected by the same economic forces that are stunting careers at American.
After two years of flying, Eagle pilots are eligible to enter a training class at American. But more than 500 Eagle pilots who are positioned to move to American are stuck at the regional affiliate because the nation's second-largest carrier hasn't hired pilots since 2001, Ryter said.
Indeed, American Airlines employs about 900 fewer pilots at O'Hare than in 2002 as a result of cuts to mainline service, said Tajer, spokesman for the Allied Pilots Association.
That career stagnation has pilots across the company nervous about the decision to hang on to the Chautauqua contract.
"We're in a frustrating situation where there should be a loyalty that American Airlines has to Eagle," Ryter said. "But more than once, we've seen American's loyalty to the dollar."
jjohnsson@tribune.com
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