American Eagle is to sell its Puerto Rico-based Executive Airlines division to help American Airlines meet scope-clause restrictions in its pilots contract. The sale will avoid the need to ground additional turboprops so that Eagle can continue taking delivery of regional jets and stay within an agreement prohibiting regional growth while mainline pilots are on furlough.
Eagle has signed a letter of intent to sell Executive back to its founder, Puerto Rican businessman Joaquin Bolivar. The deal is expected to close in the first quarter and could raise $700 million, analysts estimate. Executive was acquired by American in 1989 and merged into Eagle in 1997, but kept its own operating certificate.
Executive will continue to feed American, operating as an independent AmericanConnection regional and using its own code.
Source: Flight International
