American Airlines To Cut 700 Maintenance Jobs As Fleet Shrinks
October 28 2009 - 11:56AM
Dow Jones News
American Airlines, a unit of AMR Corp. (AMR), in the next year
will close or downsize some U.S. aircraft maintenance facilities,
cutting up to 700 jobs, or about 5% of its maintenance staff of
12,700, as the size of its fleet gets smaller.
In a letter to employees, Carmine Romano, the Ft. Worth
airline's senior vice president of maintenance and engineering,
said American will close its Kansas City facility next September
and will reduce work in San Francisco and St. Louis. The jobs
include management and union positions, where employees are
represented by the Transport Workers Union of America. Several
smaller facilities for overnight maintenance also will be
closed.
A spokesman said the union planned to make a statement on the
downsizing.
Unlike most U.S. competitors, American Airlines doesn't
outsource scheduled aircraft maintenance, and in recent years has
brought work in-house from other carriers. But, across the
industry, the trend has been to schedule routine maintenance
offshore, in countries like El Salvador, where costs are lower.
Spokesman Tim Wagner said American Airlines tried for 10 months to
get work from other airlines to keep the Kansas City maintenance
facility running, but "our bids weren't competitive with offshore
facilities, because our labor costs are higher," he said.
At American's primary maintenance facility in Tulsa, Okla., the
company performs nearly all the regular maintenance needed on its
own aircraft, and works on planes for "a number of other carriers,"
Wagner said. American sends out about 9% t0 10% of maintenance to
the original manufacturer for specialty work, such as on cockpit
avionics.
In his letter to employees, Romano noted that, as the U.S.
airline industry downsized capacity, the AMR fleet has shrunk from
a high of 900 aircraft to about 600 today. As well, older aircraft
that required more maintenance have been replaced by newer
planes.
American Airlines aims to "move toward a more flexible,
cost-efficient operation that improves flow and takes into account
the long-term impact of the recession on travel..." as well as
changes American is making to its own route network, Romano told
employees.
Meanwhile, the U.S. legislators have raised questions about
overseas maintenance contracts at some U.S. airlines. The loss of
U.S. jobs is one concern, but so, some lawmakers say, is aircraft
safety, since the Federal Aviation Administration doesn't oversee
foreign locations with the same scrutiny as domestic
facilities.
-By Ann Keeton, Dow Jones Newswires; 312-750-4120;
ann.keeton@dowjones.com