Everyone talks about mergers and consolidation but no one is doing anything about it. 
Well, Gerard Arpey at AMR has taken the first step, and it isn’t a merger. Arpey announced that AMR, parent of American Airlines, would divest itself of American Eagle, either through a sale or a spin-off to AMR shareholders. Arpey and AMR’s chief financial officer, Tom Horton, had discussed possibly spinning off the Eagle unit or another AMR unit such as its AAdvantage frequent-flyer plan, during the airline’s third-quarter analyst call. Spin-offs and divestitures have been a hot subject for months, and American was one of the first to come into the rumour mill after an Icelandic investor, FL Group, in September urged it to spin-off AAdvantage to “boost shareholder value.” The company said that it had thought about the Eagle transaction for some time, but had not yet decided how to do the deal.
The deal, which includes both the wholly owned Eagle and its Caribbean affiliate, Executive Airlines, will involve some 300 
aircraft and the existing Eagle contracts to feed American main line flights, contracts that Horton has stressed are advantageous to American. Eagle should have about $2.7 billion in revenues this year, but analysts are not certain how to value the deal. JP Morgan's Jamie Baker says $800 million is a guestimate. Its fleet is almost exclusively smaller regional jets, Embraers in the 37-, 44-, and 50-seat range, at a time when airlines and passengers want larger regional jets. And as Horton has stressed, a new owner wouldn’t have much room to tweak the contracts with American. And any new owner gets the ALPA pilot union chapter at Eagle, which said within minutes of the announcement that “we fully expect that our sacrifices will be respected and rewarded as we become a partner in whatever lies ahead.”
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