Executive Airlines flies out of Miami for American Eagle 11/06/2002 By ERIC TORBENSON / The Dallas Morning News AMR Corp, parent of American Airlines, is close to a deal to spin off its Executive Airlines regional carrier, an official close to the situation said Tuesday night. The official told The Dallas Morning News that a deal to sell the carrier is imminent. Executive flies regional passengers for American Eagle out of Miami and San Juan, Puerto Rico. The Miami Herald, citing three sources close to the airline, said the announcement would come Wednesday. AMR has scheduled a conference call for Wednesday morning to brief financial analysts on its recovery efforts. The airline industry is suffering from a severe downturn caused by the Sept. 11 terrorist attacks and tough economic conditions. American spokesman John Hotard declined to comment Tuesday night. A spin-off wouldn't be surprising. In an Oct. 16 conference call to discuss American's third-quarter earnings, chief financial officer Jeff Campbell said the company was considering selling all its non-core assets, including American Eagle. AMR recently retained Salomon Smith Barney for advice concerning the value of its mutual fund management arm, another asset that could be sold to raise cash. Some analysts have valued all of Eagle at about $700 million. AMR reported losses of $924 million for the third quarter and is expected to report large losses for the current quarter. The company's cash position is stronger than its competitors', but the carrier continues to lose money each day because of weak demand. AMR said as far back as February that the company was considering the sale of Executive or a change in its relationship with American. Executive represented about 12 percent of American Eagle's passenger traffic and 13 percent of its capacity in October. Selling Executive Airlines would pose questions about the future of its pilots. James Magee, spokesman for the Air Line Pilots Association chapter representing Eagle pilots, said Tuesday night that he would "be disappointed" if Executive were sold, adding that such a sale would violate the spirit of the 1997 agreement that that merged the pilot rosters of four commuter carriers into that of Eagle. AMR chief executive Donald Carty told employees over the weekend that the company may need to cut as much as $4 billion annually from its costs to compete with low-cost airlines. In September, Mr. Carty said the carrier needed to cut $3 billion from its annual costs.