Does Anyone Really Know How Much Mx Is Outsourced?

[FWAAA]

In this CNN article, the reporter mentions that AA outsources only 20% of its work, and keeps all heavy overhaul inhouse:

Officials at American Airlines, however, stressed the benefits of in-house work.

When the airline was trying to avoid bankruptcy, the union agreed to wage cuts to keep more maintenance in-house. Now, 80 percent of American's work stays with the airline, including all heavy maintenance.

"Having that control gives us greater ability to mitigate safety risks," said David Campbell, American's vice president of base operations.

http://www.cnn.com/2005/TRAVEL/03/03/airline.maintenance/

As with everything, it probably depends on how you measure it.

Larger percentages are often thrown around here as if they are fact; the company obviously thinks it's smaller. Anyone know for sure?

 

[eolesen]

In three or four years of hearing people ask this on various boards, I don't recall ever seeing a solid answer, since it can differ based on if you measure it on a dollar basis or a task hour basis.

The only work I can think of which is farmed out is some component and engine overhaul, plus whatever RON and on-call maintenance is performed in cities too small to be staffed by AA mechanics.

What else is there? And don't waste our time jumping up and down about things like pushbacks, deicing, etc. which may have been AMT work at one point in history, or SPR/OSM's.

I'd like to know what MRO and line work is done outside the AA umbrella.

 

[Wretched Wrench]

I am not at work now, but I believe most or all of our MD80 components are done outside. Someone with access to stores codes could track down overhaul sites for a sample of parts to be sure.

 

[Bob Owens]

We also contract out all our tires. WE used to do those in house at both JFK and LGA. We also used to repair containers, that too was contracted out but its probably not included as contracted out maintenance.

The fact is we have no real way of knowing how much the company contracts out, more than likely they have been less than forthright and the TWU has been less than diligent when it comes to keeping track.

 

[AAmech]

As we speak all heavy airframe maint is done in-house. When the CFM-56 shop is up and running then all engines will be done in-house. I think the landing gear shop also does all fleets. AA also has extensive backshops that handle seats, galleys, lavs, toilets, valves, thrust reversers, flight controls, brakes, wheels, instruments and radars.

 

[AMFAMAN]

 

[AMFAMAN]

Looks what happens when you post factual data about outsourcing; the team twu runs away and hides.

 

[Decision 2004]

As we speak all heavy airframe maint is done in-house. When the CFM-56 shop is up and running then all engines will be done in-house. I think the landing gear shop also does all fleets. AA also has extensive backshops that handle seats, galleys, lavs, toilets, valves, thrust reversers, flight controls, brakes, wheels, instruments and radars.

[post="252904"][/post]​

CFM-56?

Do you consider tear down and build-up the engine overhaul?

There is NO component overhaul tooling and there is NO money to buy it either.

Current plans are to tear the engine down and outsource component overhaul.

 

[BoeingBoy]

[post="252933"][/post]​

Excuse my sticking my nose in over here, but there was an article in one of the Aviation Week publications about 6-9 months ago (I think it was "Maintenance & Overhaul") that said AMR outsourced 6% of their maintenance. As I recall, the article didn't give the basis for the figure. Assuming the same basis was used for all airlines in the article, AMR was said to outsource the least of any U.S. carrier by far.

The problem with AMFAMAN's table is in the footnote - it's based on direct maintenance costs such as labor & materials. As such, a lot of in-house costs are ignored while the equvalent costs of the outside contractor are included in the bill AMR pays.

A perfect example is facilities cost. That cost is excluded from AMR's in-house expenditures while it is included in the bill that comes from the outside contractor. This inflates the percentage of dollars spent on outsourced maintenance (or conversely, it deflates the percentage of dollars spent in-house).

Jim

 

[AMFAMAN]

American can twist the numbers any which way they choose. Their method is to include the percentage of money spent outside to the entire maintenance budget including management, buildings, stores department, and much more. A more accurate method from a mechanic's view is to compare the actual labor hours or dollars done inhouse to the labor hours or dollars billed outside. The twu doesn't like this method as the outsourcing rate will surley climb. Funny thing is, the twu uses that rate(labor hours or dollars) as a scare tactic when claiming NWA outsources so much more.

 

[Bob Owens]

Excuse my sticking my nose in over here, but there was an article in one of the Aviation Week publications about 6-9 months ago (I think it was "Maintenance & Overhaul") that said AMR outsourced 6% of their maintenance.  As I recall, the article didn't give the basis for the figure.  Assuming the same basis was used for all airlines in the article, AMR was said to outsource the least of any U.S. carrier by far.

The problem with AMFAMAN's table is in the footnote - it's based on direct maintenance costs such as labor & materials.  As such, a lot of in-house costs are ignored while the equvalent costs of the outside contractor are included in the bill AMR pays.

A perfect example is facilities cost.  That cost is excluded from AMR's in-house expenditures while it is included in the bill that comes from the outside contractor.  This inflates the percentage of dollars spent on outsourced maintenance (or conversely, it deflates the percentage of dollars spent in-house).

Jim

[post="253068"][/post]​

And wouldnt that also be the case for every other airline on the list?

You should also keep in mind that we consider "outsourced" to be any work that is transferred away from our class and craft under the contract. Such work as R&D, deicing etc that we lost, that was contracted away from us, and work accomplished by foreign AA employeees is not counted as outsourced so these examples would deflate the figures for mechanics at AA.

 

[FWAAA]

Looks what happens when you post factual data about outsourcing; the team twu runs away and hides.

[post="253055"][/post]​

I'm not TWU nor am I AMFA.

Nice data, but I guess I should have specified "NOW" and not 2002. Don't really care what it was then. Only care what it is NOW.

Do you have any data pertaining to 2005? Or even 2004? B)

BoeingBoy made an excellent point: By refusing to acknowlege all the costs to AMR (like hangar costs), the table overstates the amounts spent on outsourced maintenance, since the bill for outsourced maintenance includes all those costs.

 

[777GUY]

You should also keep in mind that we consider "outsourced" to be any work that is transferred away from our class and craft under the contract. Such work as R&D, deicing etc that we lost, that was contracted away from us, and work accomplished by foreign AA employeees is not counted as outsourced so these examples would deflate the figures for mechanics at AA.

[post="253330"][/post]​

[/quote]



That statement could also be valid for foreign based AA AMT's. Work is actually being brought back Stateside at the moment from the foreign AA outstations. I don't believe that there is any extra going the other way. They also work under a contract and work that is now transferring back to the USA could be a seen as a breach of their working contractual agreement. I guess that they don't have the TWU to fight for them though...

Just a thought....

 

[AMFAMAN]

I'm not TWU nor am I AMFA. 

Nice data, but I guess I should have specified "NOW" and not 2002.  Don't really care what it was then.  Only care what it is NOW.

Do you have any data pertaining to 2005?  Or even 2004?    B)

BoeingBoy made an excellent point:    By refusing to acknowlege all the costs to AMR (like hangar costs), the table overstates the amounts spent on outsourced maintenance, since the bill for outsourced maintenance includes all those costs.

[post="253427"][/post]​

The twu has been less than forth coming on any data except theirs and AA's PR firm produced 20%. I would like to see real number so they can be crunched correctly. It also has been reported that the stores department employees will now fall under the M&E budget although I have yet to see this documented. If this is the case, the percentage number could artificially be deflated as the overall budget has increased, therefore the percentage of work done by vendors will decrease even though the dollar amount won't. As far as the current reports, just going to have to wait till it's free or we can try and we can go through the form 41's and figure it out. AA and the twu like to look at the fact that our planes are worked on in-house but don't acknowledge the fact that most of the components go out the door. They don't acknowledge the power by the hour work done outside, warranty work, HEICO work, and so on, this could be were the 41% came from. They are the first to point out other airlines outsourcing the airframes but again don't acknowledge the in-house component work done at some airlines. It's all just a PR deal right now with AA because they are scared to death about losing their toy union. If this wasn't the case, we would of had an election last year and USAviation would be about airlines and not union battles.

I do think it's interesting that SWA continues to bring more work in-house and expects to have all work up to a 1/2 D check in house within the next 2 years. Their outsoucing numbers will remain high as they outsource and acknowledge it most components and the lengthy full D checks. Their productivity due to being "happy employees" keeps their in-house budget low, which inflates their outsourcing percentage. I would like to see a maintenance management per aircraft comparison between SWA and AA. I would also like to see hours in-house versus hours out the door at AA.

http://www.backaviation.com/back/reports.a...OMarketForecast

Market Forecast
World MRO Market Forecast for $1,495.00

A little off the subject but not much is an interesting quote from the Wall Street Journal:

Even after extracting concessions from unions, the largest old-line U.S. carriers still have labor costs of $65 to $70 per employee-hour including supervisors and counting wages and benefits, according to Team SAI, a consulting firm in Lakewood, Colo.

Now according to my "jetnet total value," I am under $40 an hour including benefits, pension, social security, etc. AA has consistently told the twu that our hour rate including overhead is $87-$96 an hour. Please don't tell me that this management team and the building are worth $50-60 an hour.

 

[Bob Owens]

That statement could also be valid for foreign based AA AMT's. Work is actually being brought back Stateside at the moment from the foreign AA outstations. I don't believe that there is any extra going the other way. They also work under a contract and work that is now transferring back to the USA could be a seen as a breach of their working contractual agreement.  I guess that they don't have the TWU to fight for them though... 

Just a thought....

[post="253503"][/post]​

Well thats probably due to the fact that in some cases its cheaper to do it stateside because labor rates are lower. In England for instance, a mechanic at top rate would earn at least $20,000US more,(probably more due to the sinking dollar) than a mechanic doing the same job in the US.

As far as not having the TWU to fight for them , they have something better-the government. When we took our 25% cut, they didnt.