Finally - The Outsourcing Truth From American

[eolesen]

Aw, don't go shooting down the PVG maintenance conspiacy theory already...

 

[Boomer]

FWAA, Former ModerAAtor,

I'll bite, but first the disclaimer,

I don't believe that AA wil outsource maintenance to China, unless that is the only way that the Chinese will allow us to expand our presence.

I also don't beleive that showing us the schedule proves that the outsourcing couldn't be done.

The ORD-SHA flight arrives at 1425, the SHA-ORD return is schedued for 1700 local.The times are what they are, but nothing in what you posted requires that it is the same a/c that makes the turn.

AA could fly a/c 7AA into SHA arriving at 1425 on the 17th, overnight it for a scheduled "B" check, then return it to the gate to make up the 1700 departure on the 18th; towing a/c 7AB back to the hangar, arriving the 18th at 1425, for the next "B" check, and so on...In the event that a/c 7AA did not make RTS, you still have 7AB for a return leg.

 

[aafsc]

FWAA, Former ModerAAtor,

I'll bite, but first the disclaimer,

I don't believe that AA wil outsource maintenance to China, unless that is the only way that the Chinese will allow us to expand our presence.

I also don't beleive that showing us the schedule proves that the outsourcing couldn't be done.

The ORD-SHA flight arrives at 1425, the SHA-ORD return is schedued for 1700 local.The times are what they are, but nothing in what you posted requires that it is the same a/c that makes the turn.

AA could fly a/c 7AA into SHA arriving at 1425 on the 17th, overnight it for a scheduled "B" check, then return it to the gate to make up the 1700 departure on the 18th; towing a/c 7AB back to the hangar, arriving the 18th at 1425, for the next "B" check, and so on...In the event that a/c 7AA did not make RTS, you still have 7AB for a return leg.

[post="260174"][/post]​

Yes, it could be done this way. But that would involve an airplane sitting on the ground for a long time. A plane does not make money sitting on the ground. Additionally, if AA were to do scheduled maintanence there, they would have to incur the cost of stocking parts there, having tools there, and labor (contract or hiring and training Chinese AMTs who would be AA employees). Plus incurring the cost of the aircraft on the ground. It is just not cost efficient. It is much more cost efficient and easier to do the required maintanence in ORD where you already have stocked parts, tools, and trained AMTs.

 

[aafsc]

The only way I could see AA doing scheduled line maintanence in China is if they have a lot of flights there. AA builds it schedule on the times that people want to fly and aircraft utilization. I don't think AA builds it's schedule just to screw the AA/TWU AMTs. In Europe and Japan, the planes pretty much unload, cater, clean, refuel, and reload relatively quickly then fly back to the US. However, the way the schedule is set up I believe that in all of Europe only 1 777 (out of 14-16 daily flights to LHR alone) spends the night in LHR and in Japan only 1 777 (out of about 6 daily flights) spends the night there. All the rest turn right around and come back to the US. The schedule for Latin America is such that almost all cities there have overnight aircraft so they can have morning departures (or late night in deep South America). If SHA was to get 6 daily flights to the US, then you might see a 777 spend the night there and get scheduled line maintanence (like NRT). But not for 1 plane that does a quick turn.

 

[AMFAMAN]

Exactly. 2:35 isn't a lot of time to perform heavy maintenance. Hardly enough time to empty it, load the bags, cater it, fill it up and clean the bugs off the windshield.

http://biz.yahoo.com/prnews/050401/daf038.html?.v=1

[post="260160"][/post]​

That is a very short turn time, barely enough to do the required ETOPS-2 check. Anyone remember the turn time on the TPE trip because they used to schedule an A-check on it each day?

 

[Boomer]

Yes, it could be done this way. But that would involve an airplane sitting on the ground for a long time. A plane does not make money sitting on the ground. Additionally, if AA were to do scheduled maintanence there, they would have to incur the cost of stocking parts there, having tools there, and labor (contract or hiring and training Chinese AMTs who would be AA employees). Plus incurring the cost of the aircraft on the ground. It is just not cost efficient. It is much more cost efficient and easier to do the required maintanence in ORD where you already have stocked parts, tools, and trained AMTs.

[post="260181"][/post]​

------------------------------------------------

Disclaimer already filed, devils advocate active:

We already sit our aircraft down for an extended time to perform a "B" check as it is part of the required maintenance. Additionally, you failed to factor in the lower wage rates when stating that it would not pay to perform the maintenance in China and the opportunity cost of losing passenger protection in the event of a mechanical disruption of service given an OTS aircraft. Performing maintenance on this side of the "big blue" incurrs cost associated with dock space and manpower not currently employed by AA resulting in a larger cost benefit.

Further, most aircraft on the given segement are covered under warranty programs so the cost of parts is covered and therefore negligble. Brakes, tires and other items that are part of the routine wear and tear are not covered now and would have to be stocked "in situ" anyway.

Intangibles from performing previously stated maintenance are the networking abilities between AA and our Chinese codeshare partners to deepen the ties that bind and create additional opportunities which could result in additional service to the Chinese mainland or contiguous countries which are not now available.

Lastly, the TWU has exempted "new cities" from the outsourcing reporting per the current CBA:
"ATTACHMENT 1.4 – CROSS SERVICE AGREEMENT DATED MAY 27, 1974

From: Charles A. Pascinto
To: John J. Kerrigan
Re: Cross Service Agreement Dated May 27, 1974

May 5, 1989

This will confirm our discussion regarding the Letter of Agreement dated May 27, 1974, pertaining to the Cross Service Agreement. Since this letter was written, deregulation and American’s growth have brought about a change in the way we accomplish our work and we have demonstrated an enviable record of stable and secure employment.

Because of recent acquisition of some small aircraft fleets and expansion to additional cities, it is in the best interest of American Airlines and the Transport Workers Union to respond to changes in our industry. It is the intention of American Airlines to change its fleet configuration as market conditions and aircraft availability dictate. It is not economically feasible for American Airlines to purchase tooling and or construct facilities for those small fleets, which are planned to be phased out in the near term.

We have agreed, therefore, that during the term of this agreement (amendable March 1, 1993) those existing fleets of 25 aircraft or less and any new cities where we contract out our line maintenance will be exempt for reporting purposes from the Cross Service Agreement*. Our future quarterly report will reflect this change.

* (For example, the B-747 aircraft, which is planned to be replaced by the MD-11 and the B-737/BAe-146, which are planned for near term replacement. The B-727 fleet will not be segregated by fleet type.)

(Signed original on file)"

 

[eolesen]

We already sit our aircraft down for an extended time to perform a "B" check as it is part of the required maintenance. Additionally, you failed to factor in the lower wage rates when stating that it would not pay to perform the maintenance in China and the opportunity cost of losing passenger protection in the event of a mechanical disruption of service given an OTS aircraft. Performing maintenance on this side of the "big blue" incurrs cost associated with dock space and manpower not currently employed by AA resulting in a larger cost benefit.

[post="260204"][/post]​

The long sit at current B check stations is minimized by the fact that there are multiple routings available for it to cover once it returns to service, so it may only be out of service for 14-18 hours. By the same token, having multiple routing options also provides flexibility in case it doesn't return to service as quickly as possible.

I also don't know that the wage spread is quite as large as you think it is. With overhauls (MBV, C) there's a lot of work that can be done by unlicensed technicians. I don't think that's the case with the line checks -- those appear to be inspections, which means you're paying for an AMT regardless of where the work is done.

 

[Boomer]

Former ModerAAtor,

Previous disclaimers cited; devils advocate on:

The period of time you cite, 14-18 hours would fall well within the zone for a departure some 26 hours later and still allow the AOG of LRU's that have been troubleshot down to the individual component. Further, the contract allows such outsourcing until a new CBA is negotiated without having to count it as being Beijing Outsourced. The ability to turn the previous inbound against an unforseen OTS event is just another bennie to the deal.

Given the recent fluctuations in the value of the dollar against foreign currencies, with the inherent factors as a reasonable factor in that valuation, you may be correct in stating that it may be less desirable; however, AA valued the AMT domestic cost as slightly north of $95/hr. I highly doubt that anything priced on the basis of a $1 US: $8.28 CNY would be similarly valuated.
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