In an announcement that affects commercial airlines, passengers, and pilots, regional carrier Air Wisconsin will end its partnership with United Airlines [NASDAQ: UAL] and partner with American Airlines [NASDAQ: AAL].
Beginning March 2023, American will tap the Appleton, Milwaukee-based airline that operates a fleet of Bombardier CRJ-200 regional jets to fly on its behalf, primarily from Chicago O’Hare International Airport (KORD).
The new partnership announced Monday is a capacity purchase agreement, which allows American to grow its footprint without taking on more airplanes. The flights will operate under the American Eagle brand the mainline carrier uses for all regional airlines that fly on its behalf.
Some airlines have started trimming their capacity because they can't find enough pilots to operate a full schedule. Amid travel disruptions that prompted Secretary of Transportation Pete Buttigieg to urge airlines to do better earlier this summer, the airlines have begun doling out lucrative pay to recruit and retain pilots. In June, American Airlines said it would make pilots at its wholly-owned regional carriers the highest paid in the industry. These benefits won’t transfer, however, to Air Wisconsin.
Terms of the Deal
In the new five-year agreement, Air Wisconsin will operate up to 60 of its 50-seat CRJ-200s, with an initial launch utilizing 40 of the platforms. As travel tends to ramp up between March and October, the airline will decide whether to deploy its other 20 airplanes in the fleet, if they have the staff to complete the trips.
Will Pilots Benefit?
According to a Securities and Exchange Commission (SEC) filing, Air Wisconsin will be responsible for paying its own pilots, which means those pilots aren't expected to benefit from the financial upsides that pilots at their regional counterparts are expecting. On a good note, despite the United Express partnership ending, regional pilots at Air Wisconsin who are a part of the United Aviate pathway program will still be eligible to interview at United.
The SEC filing points out that American Airlines will have the right to schedule all aircraft and determine route selection, frequency, and the timing of scheduled arrivals and departures. Lastly, American will also have the right to add the CRJ-700 to Air Wisconsin's fleet to expand its service.
