American Airlines to divest regional carrier American Eagle

American Airlines said on Wednesday 28 November that it plans to divest its regional carrier American Eagle. The world''s largest airline said the divestiture of American Eagle is in the best interests of parent company AMR Corporation and its shareholders.

American Eagle operates 300 aircraft, with about 1,700 daily flights to more than 150 cities in the US, Canada, the Bahamas, the Caribbean and Mexico. It expects to generate 2007 annual revenues of $2.3 billion.

The planned divestiture would include American Eagle, which feeds American hubs throughout North America, and its subsidiary, Executive Airlines, which flies to destinations in the Bahamas and the Caribbean from Miami and San Juan, Puerto Rico.

AMR has been under pressure from investors to consider spin-offs as a way to boost its share prices. The transaction will allow American Airlines to focus on its core business. Even after the two airlines separate, American Eagle will continue to provide American Airlines with regional flight support, AMR said.

AMR said it is still evaluating the form of the divestiture. It may be a spin-off to AMR shareholders or a sale to a third party, if not some more unconventional form of separation from AMR.