AMR regional affiliates show steady revenue improvement in 2Q

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AMR's regional carriers showed in the second quarter they are becoming more efficient as they prepare to possibly be divested as part of the parent company's post-bankruptcy recovery plan.

The three regional affiliates - American Eagle, Executive Airlines and a capacity purchase deal with independent Chautauqua Airlines - posted a passenger revenue per available seat mile at around 23.2 cents in the second quarter, an 11% year-over-year improvement.

Capacity of the regional affiliates remained constant at 3.4 billion available seat miles compared to the same period a year ago, but overall revenues increases 11.1% to $790 million this year, according to the company's quarterly filing with US Securities and Exchange Commission. Meanwhile, combined traffic of the regional affiliates grew year-over-year by 3.85% to 2.7 billion revenue passenger miles.

AMR does not release a cost per available seat mile figure for its regional affiliates, so it is difficult to gauge the profitability of the operations despite the revenue improvement.

The regional operations may soon have to survive as a standalone company once AMR emerges from bankruptcy protection in 2013.

In May, AMR Eagle chief executive Dan Garton said he is planning to resume the divestiture process as quickly as the parent company returns from bankruptcy protection.

The regional affiliate was within two to three months of being spun off when AMR filed for bankruptcy protection on 29 November.

It is not clear if AMR's divestiture strategy will change after it exits bankruptcy. The parent company had outlined plans last year to have a divested AMR Eagle continue to feed passenger traffic to American Airlines under a capacity purchase agreement, with the regional affiliate paid a fixed fee for each flight based on current market rates.

Such a standalone AMR Eagle company would also be able to compete to offer passenger traffic and ground handling operations for other mainline carriers.