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Airlines increasingly seek maintenance from contractors worldwide
BY SARA KEHAULANI GOO
The Washington Post
Northwest Airlines is gutting two hangars at Minneapolis-St. Paul International Airport because the standard work of overhauling the airline's 747 fleet has moved to Asia.
Air China, meanwhile, is sending its planes to San Francisco for high-tech engine work by United Airlines mechanics.
U.S. carriers have outsourced thousands of maintenance jobs. At the same time, however, some have stepped up efforts to bring maintenance work into their shops. The major carriers are "insourcing" work from domestic low-cost carriers that don't have their own maintenance crews and from airlines based in China, South Korea, Canada and elsewhere.
The aircraft maintenance industry is "a classic manifestation of globalization," said Martin Baily, senior fellow at the Institute for International Economics. "Labor-intensive, somewhat less technically sophisticated stuff goes overseas, but more high-tech, leading-edge stuff would remain in the U.S. Maybe the U.S. even has a comparative advantage."
Delta Air Lines' insourcing includes repair work on engines for Atlantic Southeast Airlines and Comair at Delta's hub in Atlanta. Its revenue from such work has increased to $200 million last year from $40 million in 1999.
American Airlines recently signed a contract giving it the option to repair Rolls-Royce aircraft engines for other airlines. United does maintenance work for Air China, Korean Air, Air Canada and the U.S. military.
"We make a high profit margin on engine overhauls and landing gear," said Joseph Prisco, president of Local 9 of the Aircraft Mechanics Fraternal Association, which represents mechanics at United Airlines. "Air China sends a lot of their engine overhaul work to us. The costs are probably more expensive per head, but we do a faster job and better job than they can get done in their own country."
Globally, the business of repairing or overhauling airplanes is expected to grow to more than $50 billion by 2013, from $35 billion today.
The insourcing helps keep some airline employees busy and modestly bolsters the carriers' bottom line. "Through the bankruptcy process, one of the things we are trying to do is become more efficient -- to look at what we can do profitably and what we can't," United Airlines spokesman Jeff Green said.
But the global trends haven't blunted the pain felt by the mechanics on the losing end of outsourcing.
Since the terrorist attacks on Sept. 11, 2001, the U.S. aviation industry has slumped, forcing carriers to reduce costs and lay off thousands of workers. Airlines have shut down huge maintenance facilities in cities such as Oakland and Indianapolis and reconfigured hangars at Minneapolis-St. Paul. Employees who managed to keep their jobs were forced to take pay cuts -- in some cases, several times.
Airlines such as Northwest and Continental and delivery companies FedEx Corp. and United Parcel Service Inc. outsource so-called heavy checks, which are required when planes reach a certain age, to Asia. The heavy checks are more labor-intensive because they require an entire strip-down of the aircraft and repair or replacement of major components, such as the fuselage. Lower pay in Asia makes the work more affordable.
"They have no intentions of bringing that heavy work back in," said Jim Atkinson, president of AMFA Local 33 at Northwest Airlines in Minneapolis. "It's very disturbing for me that hundreds of millions of dollars are supporting China and Singapore's economy."
More than half of all maintenance work for U.S. airlines is now performed by contractors -- foreign and domestic -- and that figure is projected to grow to 60 percent by 2008, according to aviation analysis firm Back Aviation Solutions.
Just how much of that work is contracted to firms overseas is difficult to quantify because the Federal Aviation Administration doesn't track such numbers and the companies that conduct the repairs are reluctant, for competitive reasons, to reveal their customers. Unions also could not provide figures of exactly how many jobs have gone overseas.
American, United, US Airways and Delta said they send no maintenance work overseas except for quick overnight repairs. Those carriers are restricted by new pay-slashing contracts from sending jobs overseas.
"Typically, U.S. carriers will tend to keep their outsourcing in North America for obvious reasons," said Steve Casley, principal of Back Aviation.
"You want to reduce the amount of transportation costs to have the work done."
Union officials claim that the United States has less oversight over foreign workers and that planes could be exposed to sloppy work or sabotage overseas.
For example, airline maintenance workers elsewhere don't have to undergo mandatory drug and alcohol testing or criminal background checks as they do in the United States. "There is a double standard for airline maintenance," said Ed Wytkind, president of transportation trades at the AFL-CIO. "You can't create a fortress-like security in the U.S. but lose those standards overseas."
Continental, which has maintenance performed in Hong Kong and Canada, keeps its own employees on-site overseas, spokeswoman Julie King said. "We have our own airline quality control and quality assurance representatives that oversee the maintenance, and our quality assurance regularly conducts audits of our suppliers," King said. "It's a very comprehensive procedure."
The FAA said it recently tightened rules to keep better track of third-party maintenance contractors in the United States and overseas.
The FAA action came in response to a Department of Transportation inspector general report last year highlighting serious lapses in oversight of independent maintenance facilities in the United States and abroad.
BY SARA KEHAULANI GOO
The Washington Post
Northwest Airlines is gutting two hangars at Minneapolis-St. Paul International Airport because the standard work of overhauling the airline's 747 fleet has moved to Asia.
Air China, meanwhile, is sending its planes to San Francisco for high-tech engine work by United Airlines mechanics.
U.S. carriers have outsourced thousands of maintenance jobs. At the same time, however, some have stepped up efforts to bring maintenance work into their shops. The major carriers are "insourcing" work from domestic low-cost carriers that don't have their own maintenance crews and from airlines based in China, South Korea, Canada and elsewhere.
The aircraft maintenance industry is "a classic manifestation of globalization," said Martin Baily, senior fellow at the Institute for International Economics. "Labor-intensive, somewhat less technically sophisticated stuff goes overseas, but more high-tech, leading-edge stuff would remain in the U.S. Maybe the U.S. even has a comparative advantage."
Delta Air Lines' insourcing includes repair work on engines for Atlantic Southeast Airlines and Comair at Delta's hub in Atlanta. Its revenue from such work has increased to $200 million last year from $40 million in 1999.
American Airlines recently signed a contract giving it the option to repair Rolls-Royce aircraft engines for other airlines. United does maintenance work for Air China, Korean Air, Air Canada and the U.S. military.
"We make a high profit margin on engine overhauls and landing gear," said Joseph Prisco, president of Local 9 of the Aircraft Mechanics Fraternal Association, which represents mechanics at United Airlines. "Air China sends a lot of their engine overhaul work to us. The costs are probably more expensive per head, but we do a faster job and better job than they can get done in their own country."
Globally, the business of repairing or overhauling airplanes is expected to grow to more than $50 billion by 2013, from $35 billion today.
The insourcing helps keep some airline employees busy and modestly bolsters the carriers' bottom line. "Through the bankruptcy process, one of the things we are trying to do is become more efficient -- to look at what we can do profitably and what we can't," United Airlines spokesman Jeff Green said.
But the global trends haven't blunted the pain felt by the mechanics on the losing end of outsourcing.
Since the terrorist attacks on Sept. 11, 2001, the U.S. aviation industry has slumped, forcing carriers to reduce costs and lay off thousands of workers. Airlines have shut down huge maintenance facilities in cities such as Oakland and Indianapolis and reconfigured hangars at Minneapolis-St. Paul. Employees who managed to keep their jobs were forced to take pay cuts -- in some cases, several times.
Airlines such as Northwest and Continental and delivery companies FedEx Corp. and United Parcel Service Inc. outsource so-called heavy checks, which are required when planes reach a certain age, to Asia. The heavy checks are more labor-intensive because they require an entire strip-down of the aircraft and repair or replacement of major components, such as the fuselage. Lower pay in Asia makes the work more affordable.
"They have no intentions of bringing that heavy work back in," said Jim Atkinson, president of AMFA Local 33 at Northwest Airlines in Minneapolis. "It's very disturbing for me that hundreds of millions of dollars are supporting China and Singapore's economy."
More than half of all maintenance work for U.S. airlines is now performed by contractors -- foreign and domestic -- and that figure is projected to grow to 60 percent by 2008, according to aviation analysis firm Back Aviation Solutions.
Just how much of that work is contracted to firms overseas is difficult to quantify because the Federal Aviation Administration doesn't track such numbers and the companies that conduct the repairs are reluctant, for competitive reasons, to reveal their customers. Unions also could not provide figures of exactly how many jobs have gone overseas.
American, United, US Airways and Delta said they send no maintenance work overseas except for quick overnight repairs. Those carriers are restricted by new pay-slashing contracts from sending jobs overseas.
"Typically, U.S. carriers will tend to keep their outsourcing in North America for obvious reasons," said Steve Casley, principal of Back Aviation.
"You want to reduce the amount of transportation costs to have the work done."
Union officials claim that the United States has less oversight over foreign workers and that planes could be exposed to sloppy work or sabotage overseas.
For example, airline maintenance workers elsewhere don't have to undergo mandatory drug and alcohol testing or criminal background checks as they do in the United States. "There is a double standard for airline maintenance," said Ed Wytkind, president of transportation trades at the AFL-CIO. "You can't create a fortress-like security in the U.S. but lose those standards overseas."
Continental, which has maintenance performed in Hong Kong and Canada, keeps its own employees on-site overseas, spokeswoman Julie King said. "We have our own airline quality control and quality assurance representatives that oversee the maintenance, and our quality assurance regularly conducts audits of our suppliers," King said. "It's a very comprehensive procedure."
The FAA said it recently tightened rules to keep better track of third-party maintenance contractors in the United States and overseas.
The FAA action came in response to a Department of Transportation inspector general report last year highlighting serious lapses in oversight of independent maintenance facilities in the United States and abroad.
The fact remains if it doesn't benefit someone directly in upper management it is to much of a burden for this company to ever pursue. That is the sad truth. :angry: And I for one see no change in corporate culture in the near or far future. Thats why I say full pay and benefits till the last miserable day. 
.......Again, UAIR execs have absolutely ZERO interest in such an endeavour because they need employees to accomplish such an undertaking. And they want to pare the workforce even more than they already have in a desperate attempt to better the bottom line. Once again they choose to follow the wrong road and probably paid a handsome amount for that advice :angry: !! SUCKERS!!!!
