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Old 06-11-2021 | 03:35 PM
  #1170  
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Bucking Bar
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From: Douglas Aerospace post production Flight Test & Work Around Engineering bulletin dissembler
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Originally Posted by Mesabah
The bankruptcy judge threw out their codeshare/joint venture restrictions, not their labor law protections. Even in bankruptcy, management can't operate any RJ's that aren't permitted flying by the pilot group.
Actually, Judge Lane gave American Management access to more & much larger regional jets than provided for in the labor protective provisions that were struck down. Here is a portion of the relevant section of the ruling:

a) Regional Jets

Network carriers often enter into partnerships with smaller regional airlines, known as commuter air carriers, under which the commuter carriers will fly smaller-sized aircraft referred to as regional jets on behalf of the network carrier. The use of regional jets is meant to assist larger carriers in their network planning, by allowing the carriers to match the type and size of aircraft with the demand in certain local markets. In this way, passengers can be connected from smaller airports to larger airports that serve as hubs for the larger carriers. The APA has concerns about regional flying, because it is not done by APA members.

For purposes of this decision, the term “regional jet” refers to the flying of these aircraft by commuter air carriers, and not by the network carrier itself.


As a result, the existing APA agreement contains significant limitations on American's ability to use regional jets. It permits American to partner with regional carriers flying planes with 50 or fewer seats and a maximum take-off weight (“MTOW”) of no more than 64,500 pounds. (Newgren Decl. ¶ 55). These regional jets cannot exceed 110% of the number of narrow body aircraft flown at the mainline, allowing for the current use of up to 536 regional aircraft of 50 seats or less. (Eaton Decl. ¶ 13; APA Ex. 501 § 1.D.5.c). Additional restrictions include limitations on the type and number of routes on which these aircraft can be flown. (Newgren Decl. ¶¶ 63–66; Glass Decl. ¶ 74). If American does not own the commuter airline, further restrictions apply. (Newgren Decl. ¶¶ 64–66; Glass Decl. ¶ 75; APA Ex. 501 § 1.D.5). American has received permission from the APA to contract for flying with its owned regional affiliate, American Eagle Airlines, using 47 specific jets that have a maximum of 70 seats, but these jets cannot be replaced when they are retired. (Newgren Decl. ¶ 55; AA Ex. 802A).

American puts this number at 537. (AA Ex. 802a; Glass Decl. ¶ 72 n.73).


American also utilizes some turboprop planes, but their present or future use does not appear to be contested.


The March 21 Proposal would allow American's regional partners to fly aircraft with a maximum of 88 seats and a MTOW of 114,500 pounds. (AA Ex. 918). The maximum number of regional jets of 51 to 88 seats would be capped at the greater of 255 or 50% of the total number of mainline aircraft in use at the time. (AA Ex. 918; American's APA Motion at 23 n.18). The maximum number of regional jets of 50 seats or less would remain at 110% of the narrow body aircraft flown at the mainline at the time. (AA Ex. 918). Additionally, the distinction between owned and non-owned commuter carriers would be eliminated—all would be operated as if owned. (AA Ex. 918). Based on current fleet size, the APA calculates that the March 21 Proposal would permit the Company to use 536 regional jets of up to 50 seats and 304 regional jets of 51 to 88 seats. (Eaton Decl. ¶ 25). The APA's primary objection relates to the use of the larger regional jets. The APA fears that the March 21 Proposal would permit American to create or acquire a separate airline to fly a large fleet of Embraer 190 aircraft with larger seat capacity, and thus would ultimately reduce flying by APA union pilots at the mainline. (Eaton Decl. ¶ 18).

American argues that they must be permitted to expand their use of larger regional jets because the current restrictions inhibit American's ability to generate revenue. Specifically, smaller regional jets of 50 seats or less are not fuel efficient and are no longer manufactured due to a lack of commercial viability. (Newgren Decl. ¶ 56–57; Glass Decl. ¶ 73; Trial Tr. 88:13–89:14, May 21, 2012 (Kasper)). Additionally, these smaller regional jets have a much more limited range and cannot be used for certain city-pairs that could be served by larger regional jets. (Newgren Decl. ¶ 56). Smaller regional jets also cannot be configured to offer the type of two-class service that generally attracts the “high value” customers that American seeks. (Newgren Decl. ¶ 58; Glass Decl. ¶ 73; Trial Tr. 88:13–89:14, May 21, 2012 (Kasper)). Furthermore, there are markets with significant revenue opportunities that cannot be adequately served by American's mainline aircraft, which are too large and thus poorly suited for these markets. (Newgren Decl. ¶ 59). American has stated that it cannot substitute use of its own smaller aircraft for these regional flights due to the high cost of its operations in comparison to regional carriers, including pilot and other labor costs. (Newgren Decl. ¶ 59; Vahidi Decl. ¶ 19).

In evaluating what is necessary under Section 1113, courts often look to the standards in the industry, comparing how the debtor's proposed changes stack up against its competitors. See Carey Transp., 816 F.2d at 90 (labor costs). The APA argues that the request of American is inconsistent with industry standards, both in terms of maximum number of seats and MTOW. It notes that none of American's major competitors are currently using regional jets with 88 seats or any aircraft with a MTOW of greater than 90,000 pounds. (Eaton Decl. ¶ 19; APA Exs. 507, 510). Consistent with the trend in the industry, however, the Court concludes that American needs to use such jets to both compete with its peers in terms of matching market size and to generate additional revenue. The Court finds, therefore, that American has shown that the request in the March 21 Proposal is reasonable and necessary when compared to its network competitors.

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The decision goes on to consider the large number of 76 seat jets negotiated at Delta. Who knows if Judge Lane might have decided differently if Delta had not allowed the 255 76 seaters.

Last edited by Bucking Bar; 06-11-2021 at 03:54 PM.
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