Boston, MA 10/06/2014 (wallstreetpr) – American Airlines Group Inc (NASDAQ:AAL) is planning to change jets from Envoy Air Inc, its regional unit, Miami flights with bigger ones from a division of Republic Airways Inc. This could be a follow up action of the pilot’s vote in March to reject a fresh contract.
Job Cut
As a result of replacement of jets, there would be job cuts of approximately 50 at Envoy Air, Reuters reported. American Airlines Group Inc (NASDAQ:AAL)’s Envoy would also roll back its Miami flights to 37 departures daily from 60 commencing from December 18, the report quoted a letter written by CEO of Envoy to its employees.
American Airlines Group Inc (NASDAQ:AAL) indicated that it contracted bigger 76-seat planes from Republic for the routes more often than not in and nearby Florida. The latest move only brings out the big airline companies’ emphasis on distancing themselves from the smaller planes, which were once used extensively by their carriers to attract more passengers besides increasing fuel efficiency.
American Airlines Group Inc (NASDAQ:AAL) said that it predicted a loss of 50 jobs in maintenance, management besides support jobs in Miami in Envoy unit amidst its relocation of 11 of its 50-seat aircraft. It indicated that some of them may replace smaller Envoy planes in other locations too, which were to be retired soon.
Fuel Efficiency
The move was termed as a follow-up action to the Pilot’s rejection of new labor contract that dealt with higher health care expenses besides wage freeze. However, there appears to be widespread efforts on the part of airline companies to replace 50-seater aircraft.
According to an industry consultant, Robert Mann, not only in American Airlines Group Inc (NASDAQ:AAL), every other airline was moving towards 70-seat aircraft as a replacement due to fuel efficiency. He said that in 50-seat jet, the fuel burn ratio for a seat and an hour was far higher than the 70-seat.
American Airlines Group Inc (NASDAQ:AAL)’s spokesperson clarified that the pilot’s contract rejection has got nothing to do with its decision to replace its jets. The spokesperson said that the company was only moving ahead to match the right places for the typical market.
