American Airlines Group Inc (AAL.O) subsidiary Envoy Air plans to transfer at least 50 Embraer 145 (EMBR3.SA) aircraft to other regional carriers beginning in early 2015 in a move that will lead to job cuts, according to an internal letter reviewed by Reuters.
American said it decided to transfer the aircraft because the number of pilots at Envoy has dwindled in recent months. The move is the latest setback for the regional carrier since it announced about 50 other job cuts last month.
"Given the number of Envoy pilots flowing through to American each month or leaving due to normal attrition, Envoy will not have the pilots we need to fly our 2015 schedule," Kenji Hashimoto, American's senior vice president of regional carriers, said in the letter.
"Without a cost-effective pilot agreement in place, Envoy will not secure new jets and faces challenges in recruiting new pilots without the promise of a renewed fleet," he added.
Envoy pilots rejected a labor contract in March.
While baggage handlers, ticket and gate agents will keep their jobs, Envoy will likely fire some maintenance workers, according to a spokesperson at American who asked not to be named. It was not immediately clear how the news would impact flight attendants.
One of American's other regional subsidiaries, Piedmont Airlines, will receive at least 20 of the transferred aircraft. Trans States Airlines and a second contractor yet to be announced will receive the remaining jets, the letter said.
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