American Airlines will outsource heavy maintenance on (4) 757 aircraft to TIMCO in North Carolina within the next month.  You might imaginge that American’s Tulsa maintenance union thinks that is just an awful idea.

American says it needs to do this because of a backlog of maintenance at its Tulsa center and the local TWU says that American knew about this maintenance more than a year ago and failed to do anything about it including considering the union’s proposal to keep the maintenance in Tulsa.

Making decisions like this at an airline always involves more variables than most can consider.  Do you pay overtime to get the work done internally?  Do you have the space to do the work internally?  Is your labor force fatigued and unable to keep pace?  Is the costs to do it in house higher than outsourcing?   Do you want to try outsourcing to see if pursuing a long term outsourcing strategy is worthwhile on a grander scale?

Is this a move by AA to pursue outsourcing?  Actually, I kind of doubt it.  AA’s maintenance facilities have done their work not just cost effectively but in concert with the unions and the results have shown.  Right down to its labor force finding additional cost savings both in time and money as well as showing that AA could save more money by doing certain small items like “tuning” the engines more frequently for more fuel savings. 

I think that AA just also recognizes that having a backlog of maintenance on aircraft could cost them flights and those flights represent revenue.  On the other hand, the unions have to make noise about it because they are unions, they want to protect jobs and they want to keep their jobs. 

The real failure here is in not simply reaching an agreement with the unions over this issue quietly.  It sets up the perception that executive leadership isn’t listening and why reinforce that perception among its labor force?

Filed under: Airline Fleets by ajax