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AMR makes 2nd attempt to divest American Eagle

AMR Corp. is looking to spin-off its American Eagle regional carrier. (Credit: © Mauricio Pascual)

For the second time in the past five years, AMR Corp., parent company of American Airlines Inc., has announced plans to divest its wholly owned regional carrier American Eagle. The strategy calls for spinning off the operation as an independent business.

“We believe that a divestiture of Eagle would be in the best interests of AMR and Eagle, as well as our shareholders, customers and employees,” said AMR CEO Gerard Arpey. “Strategically for AMR, it would be beneficial, as we could, over time, diversify our regional feed with additional regional airlines to ensure we have access to the most competitive rates and service.”

A divesture, he said could make it viable for American Eagle to pursue business opportunities from other carriers and allow it to grow.

“I am proud of the accomplishments of American and Eagle as a combined group of companies under AMR for the past 26 years, and I look forward to their future, independent successes,” Arpey said.

A specific time frame for the divestiture was not announced. While AMR is envisioning the divestiture as a spin-off, it remains open to other options, including a sale, as the transaction moves forward, company officials said.

The first time AMR spoke of divesting its Eagle operation was in November 2007, when it said it wanted to focus on its U.S. mainland business. However, the carrier desisted from its plans in August 2008, as market conditions were not favorable for a deal, company officials said at the time.

American and American Eagle established their first Caribbean hub in San Juan in 1986. At its peak, it offered more than 100 daily flights to 38 Caribbean destinations. However, during the last four years, the operation has been significantly reduced to about 58 daily flights.

Author Details
Author Details
Business reporter with 30 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

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