American Airlines Group (AAL.O) on Wednesday said it assigned 20 new Embraer jets to Compass Airlines, which will start providing regional service under the American Eagle brand next year.
American had ordered 60 76-seat regional jets from Brazil's Embraer (EMBR3.SA) last year and had pledged to assign them to its American Eagle Airlines unit, which is now named Envoy, if pilots agreed to labor concessions.
But after Envoy pilots represented by the Air Line Pilots Association voted down a concessionary contract in March, American said it would look to place the jets with other carriers.
Compass, a unit of St. Louis-based Trans States Holdings, said in a statement that it expects to start flying the jets in the 2015 first quarter. The addition of the 20 American planes will increase the Compass fleet to 62 aircraft, it said. As part of the deal, American could assign more E175 planes to Compass.
American is still mulling options for the other 40 Embraer E175 jets, spokeswoman Martha Thomas said on Wednesday. She added that Compass won the 20 jets in "a very competitive bidding process that included several bidders."
(Reporting by Karen Jacobs in Atlanta; Editing by Nick Zieminski)