Oct 3 (Reuters) - American Airlines Group plans to replace jets from its regional unit Envoy Air Inc out of Miami with larger ones from a Republic Airways Inc unit, leading to about 50 job cuts at Envoy.
The move follows Envoy pilots’ vote in March to reject a new labor contract including a wage freeze and increased healthcare costs. At the time, American said other regional carriers that fly under its American Eagle brand, such as Republic, would get more work from the world’s largest airline.
Envoy will roll back its Miami flights to 37 daily departures from 60 starting Dec. 18, according to a letter that Envoy Chief Executive Officer Pedro Fábregas sent to employees. American instead will contract larger 76-seat planes from Republic for these routes, mostly in and nearby Florida.
The move highlights how U.S. airlines are distancing themselves from the small planes once widely used by their feeder carriers to pack in more passengers and increase fuel efficiency. Envoy anticipates cutting about 50 maintenance, management and support jobs in Miami as it relocates 11 of its 50-seat aircraft, some of which may replace smaller Envoy planes elsewhere that are to be retired.
“The 50-seat aircraft are going, not just at American, but at every airline,” said industry consultant Robert Mann. “The fuel burn per seat per hour on a 50-seat jet is far higher (than on) a 70-seat replacement.”
The larger planes also allow American to offer two cabin classes rather than one on these regional Miami routes, American spokeswoman Martha Thomas said.
Thomas said that the Envoy pilots’ contract rejection did not influence the change, adding that the airline was only matching “the right planes for the right market.”
While Envoy did not say it intended to fire any pilots, Mann said Envoy’s fleet reduction may result in pilot furloughs, unless American hires them for its mainline fleet, which has occurred in the past.
American stock rose about 6.8 percent to close at $36.23 Friday, although it was not immediately clear that the announcement caused the increase. (Reporting By Jeffrey Dastin; Editing by Bernard Orr)