American Airlines owes Kansas City $23.55M for lease on overhaul base

[Hatu]

American Airlines is on the hook to pay the Kansas City Aviation Department $23.55 million in rent for the remaining 20 years of American’s lease on the overhaul base at Kansas City International Airport — despite American’s plan to close the base in September.

http://kansascity.bizjournals.com/kansasci....html?ana=yfcpc

 

[TIME FOR CHANGE]

They dont want us to have the money so might as well give it to someone else

 

[TWU informer]

LABOR COST IS THE PROBLEM AT AMERICAN AIRLINES!!!

 

[The Goose]

Either legal is rather inept (which I seriously doubt), or this is another step towards the bankruptcy petition I believe Horton wants to file and eliminate aircraft maintenance.

The $23.5 million isn't too bad a bill for American, all considered, but the "remediation" part is the real stinker. How many BILLION might be required to "remedy" (to EPA's satisfaction) what TWA did on the property for as long as they were there?

I agree, Informer - labor cost is 100% of the reason American Airlines can't make any money.

 

[Hopeful]

No big deal. comes out to $1177500 per year. They might as well take the full term to repay it.
More than enought made up for when you consider the headcount reduction there.

 

[The Goose]

No big deal. comes out to $1177500 per year. They might as well take the full term to repay it.
More than enought made up for when you consider the headcount reduction there.

I agree, but what I pointed out was the part about "remediation" - that's kinda like what has to be done to the property after, say, a refinery vacates its premises. There's probably plenty of lovely non-PC chemical crap everywhere from the many years of TWA's operations (you know - back when none of that stuff would hurt people) that has to be cleaned up and, as the article said, American will be on the hook for the cost of said cleanup/remediation as those terms were without a doubt part of the lease AMR agreed to assume when TWA was bought.

The lease payments Kansas City wants to collect, as you rightfully point out, does become relative nickel and dime stuff at that point, compared to what may be required.

As far as finding another tenant - if the place is polluted as was implied in Kansas City's announcement, that ain't happening until the property is cleaned up.

 

[MCI transplant]

<_< ------- The problem of being on the hook for clean up might not be as dramatic as you suggest. The portion of the base covered by AA's lease is the "newer" end. AA carved up the old TWA base, on paper, to minimize just such a problem. ---------As far as justifying the base closure by saying the cost savings because of less head count, isn't as great as it may seem. You have to take into account the fact that a number of those still working there will just bid out into the system. Where's the gain there? ------ How many will do this? Who knows?

 

[The Goose]

<_< ------- The problem of being on the hook for clean up might not be as dramatic as you suggest. The portion of the base covered by AA's lease is the "newer" end. AA carved up the old TWA base, on paper, to minimize just such a problem. ---------As far as justifying the base closure by saying the cost savings because of less head count, isn't as great as it may seem. You have to take into account the fact that a number of those still working there will just bid out into the system. Where's the gain there? ------ How many will do this? Who knows?

It would be nice if AMR didn't shoot itself in its collective foot for a change, but we'll see.

One thing IS for certain - we don't have the whole picture now and won't 'til after the fact - maybe.

 

[MCI transplant]

It would be nice if AMR didn't shoot itself in its collective foot for a change, but we'll see.

One thing IS for certain - we don't have the whole picture now and won't 'til after the fact - maybe.

<_< ------ Goose, I think you may be right. I get that feeling also that something may be in the works!------ I'm wondering how long will AA management tolerate being number two on the totom pole as to Airline size?---- Just a gut feeling! :unsure: And they're still bringing work into MCI! I heard maybe they may be doing a silver tail 767 "C" check!------- Go figure!!!

 

[Hopeful]

<_< ------- . ---------As far as justifying the base closure by saying the cost savings because of less head count, isn't as great as it may seem. You have to take into account the fact that a number of those still working there will just bid out into the system. Where's the gain there? ------ How many will do this? Who knows?

If any number bumps throughout the system, mechanics will hit the street. At the end of the day you will see a few hundred mechanics off of AA's payroll around the system. And the yearly savings of mechanics on layoff will far exceed the 20yr lease payments due at MCI.

 

[MCI transplant]

If any number bumps throughout the system, mechanics will hit the street. At the end of the day you will see a few hundred mechanics off of AA's payroll around the system. And the yearly savings of mechanics on layoff will far exceed the 20yr lease payments due at MCI.

<_< ------- Hopeful, sounds good,-------- but keep in mind that we're not talking a large number of Mechanics here! "Far exceed the 20yr lease payments", doubtful!!!! ------And how many of them would displace jr. Mechanics, or just be absorbed into the work place due to attrition, or worker shortage?

 

[Hopeful]

MCI, look at this way. If AA considers the total value per mechanic at say, $84,000. Now you multiply that by, say, 500 mechanics. That comes out to $42,000,000 annually. There are other variables, but this is in the neighborhood of savings to the company.
Keep in mind, the company already announced 700 maintenance and management positions will be eliminated. SFO is taking a big hit also.

 

[MCI transplant]

MCI, look at this way. If AA considers the total value per mechanic at say, $84,000. Now you multiply that by, say, 500 mechanics. That comes out to $42,000,000 annually. There are other variables, but this is in the neighborhood of savings to the company.
Keep in mind, the company already announced 700 maintenance and management positions will be eliminated. SFO is taking a big hit also.

<_< ------ Are we talking MCI here Hopeful?------ If we are, ( reality check!) MCI doesn't have 500 Mechanics! Not near that number! And, you're not listening to what I'm saying! Not all of those that chose to bump the system will displace Jr. mechanics!------- And if your talking system wide, your trying to justify the closing of MCI by the savings of lay offs at other stations?------ Sorry, but it may be just me, but that just doesn't compute! :huh:

 

[FWAAA]

<_< ------ Are we talking MCI here Hopeful?------ If we are, ( reality check!) MCI doesn't have 500 Mechanics! Not near that number! And, you're not listening to what I'm saying! Not all of those that chose to bump the system will displace Jr. mechanics!------- And if your talking system wide, your trying to justify the closing of MCI by the savings of lay offs at other stations?------ Sorry, but it may be just me, but that just doesn't compute! :huh:

It's just you. The numbers add up.

The article linked in the OP says that 490 local jobs will be lost when MCIE closes. Of course not all of them are mechanics - some are management, no? That said, I'd say Hopeful's estimates are probably pretty close to "reality." So multiply 490 jobs by the average expense per employee if that satisfies you more than using Hopeful's round number of 500.

AA is currently flying 100 fewer mainline jets than it was immediately before the TWA asset purchase. December 2000's mainline fleet was over 700. Today, AA's mainline fleet is 604.

It's not a conspiracy to eliminate everything TWA. The reality is that AA needs less hangar space than it did in December, 2000 and it needs a whole helluva lot less hangar space than it needed with the nearly 900 mainline jets it flew when combined with TWA's planes.

It doesn't matter if some MCIE mechanics bump others in the system. The reality is that AA is cutting almost 500 jobs at MCIE plus another few hundred jobs at SFO and other line maintenance stations. Fewer planes = fewer mechanics needed to maintain them.

 

[eolesen]

Don't forget fewer fleet types. 12 fleet types that I can identify down to just 6 now that the Airpig is gone.

In addition to the simplification on the dock plans, the reduction of fleet types has probably had a serious ripple effect on the backshops and Stores as well. Fewer fleet types means fewer variants on every major component or rotable, and also reduces the overall parts and tooling inventory necessary to cover the line...