Another factor which seems to be left out is fuel. If you burn 30,000lbs of fuel flying down to El Salvador, along with tying up the crew thats additional costs that offset the labor savings, figure thats at least a $10,000 hit right there.
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<_< ------- Is that one way? Or round trip? :huh:
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It would depend on the airplane type obviously, but probably about the minimum for a one way trip on a wide body or about round trip on a 737. That would be from DFW/MIA.
And for Hopeful - thanks. I knew that DL used to claim they did a fair amount of maintenance for other carriers, but didn't know it had changed (well, I did know that the DFW hanger closed when they pulled the hub there down - that was well before I retired - but assumed they moved that work to other facilities).
Jim
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That's right, crow about investment in new equipment. Because Lord knows you would attack Arpey & Co. if they weren't buying new planes. No matter the decision they make, it is always wrong to some of you.
Fact is that AA is growing strategically and mostly on international routes (domestic 737 deliveries are going to replace fuel sucking MD80s). So if you take a step back and apply some rational thought to this, you'd see that profitable international growth and domestic fuel savings will lead to an AA that is sustainably profitable. And an AA with money is one that can afford to give you more pay.
Fact is that AA is growing strategically and mostly on international routes (domestic 737 deliveries are going to replace fuel sucking MD80s). So if you take a step back and apply some rational thought to this, you'd see that profitable international growth and domestic fuel savings will lead to an AA that is sustainably profitable. And an AA with money is one that can afford to give you more pay.
True, but the fuel and crew cost of flying a narrowbody plane to SAL from DFW is de minimis compared to the labor costs of a narrowbody heavy C check. DFW-SAL is about 1,431 miles, requiring about 2,100 gallons of fuel in a 738, or about $5,000 each way at today's fuel prices. The flight deck crew costs would be about $1,500 each way, adding up to about $13,000 total for a round trip. Add a little more if the crew has to overnight instead of immediately turning around and flying another plane back to DFW. For an MD-80, figure on about $16,000 total due to the poor gas mileage of the MD-80.
The AA labor cost for a heavy C check is between $1.0 million and $1.5 million, so the Salvadoran chop shop only has to undercut AA's labor costs by about $13,000 (738) or $16,000 (MD-80) to balance out the expense of flying the plane there. My guess is that the SAL MROs are able to charge substantially less, more than covering those incremental ferry expenses. Widebodies tend to be overhauled in Asia (many in SIN, HKG and other parts of China), and the incremental cost of flying a 777 from NRT or PVG or PEK to an Asian MRO is similarly de minimis compared to the potential labor cost savings.
As you have mentioned before, other large variables include the amount of time it takes to accomplish the overhaul and the lost revenue that represents. If the offshore MRO takes twice as long as the experienced crew in Tulsa, that adds up to a lot of downtime when the plane isn't helping to pay for itself. Frequently, posters here have mentioned the improvements in turn times at TUL as being possible justifications for keeping heavy overhaul in TUL instead of moving it offshore. I assume that someone at AA HDQ calculates the exact numbers and monitors whether TUL remains a better deal for AA's bottom line than closing TUL and shipping the planes elsewhere for heavy C checks. Lots of things are still manufactured in the USA when the better trained, more experienced labor produces at a much higher level of productivity. At current AA TWU mechanic and related wages, my guess is that the TUL operation is probably not substantially more expensive on balance than outsourcing the work. At your hoped-for $45/hr to $47/hr (putting your wages up in the WN/UPS/FedEx brackets), it's entirely possible that the opposite conclusion would be reached.
In addition, there are MROs in places like Mobile, Alabama (as Bronner, former CEO of USAir from Alabama pension fund wanted to utiilize) and other stateside MROs that involve shorter ferry flights, but it's entirely possible that they're booked up taking care of everyone else's planes.
WN sends some of its planes to SAL as well as to three domestic MROs for heavy airframe overhaul:
http://www.tulsaworld.com/business/article.aspx?subjectid=45&articleid=20090703_45_E1_Southw927611
In its SEC filings, WN makes clear that it performs substantially all its line maintenance and some periodic checks inhouse, but that it outsources all of its heavy airframe overhaul work to third party MROs. Given its long, unbroken streak of profits, I doubt that Aeroman, ATS, AAR and PEMCO are more expensive than doing the work inhouse. If it was more expensive to outsource it to those four MROs, then WN would hire several thousand mechanics and do the work inhouse, no?
WN isn't the only US-based airline sending its planes to Aeroman, as USAir and jetBlue also send their planes there for overhaul.
BoeingBoy: The odd thing about DL is that its Delta TechOps divisiion performs some heavy overhaul for other airlines but that it outsources quite a bit of its own heavy overhaul. I don't get that part.
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I wouldn't say the LABOR cost for a heavy C check is in the range of 1 to 1.5 million. I'd most likely believe the total cost PARTS PLUS LABOR would be in that range.
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Is it type specific? I can see outsourcing a type if DL only flies a relatively small number of them if the heavy checks involve specialized equipment. At the end of the day, all airlines outsource some things since it's not worth maintaining the in-house capacity to do it. When have airlines ever made tires or recapped them, brake components, etc. Most carriers outsource engine overhaul, avionics, etc. Those become "remove and replace" work for the carrier.
Jim
I would have thought so, too, but according to AA (it's on the website), a narrowbody heavy C check takes between 20,000 and 30,000 labor hours and I used a $50/hr rate (AA's total labor cost, not your wages, which I realize are substantially less than $50/hr). That $50/hour includes the TWU represented employees plus an estimate for management at TUL - and it's probably a conservative estimate since AA management is bloated and expensive.
Bob Owens has mentioned something about a $90/hr charge by AA to other airlines for maintenance services, which I presume is more than AA's total costs, so $50/hr seems like a fair estimate. Additionally, I realize that not everyone at TUL holds licenses and makes the topped out $33/hr A&P wage, so that's another vote for the $50/hr estimate rather than something closer to $90/hr. With wages and benefits (like employment taxes, pension expense and health insurance), AA's A&Ps cost AA at least $45/hr and probably more. Considering the cheaper non-license holders (OSMs?) and the more expensive management, $50/hr labor costs estimate for overhaul seems fair.
Many years ago, AA reported that early retirement of some DC-10s immediately before overhaul would save something like $2 million (or maybe it was $4 million - I'll look it up) each in parts and labor.
At NWA, we had wheel/brake shops, engine overhauls, and avionics shops. Most airline's had that up until the 2000's. Some still do.
With the purchase of the Airbus aircraft at NWA, the warranty work, with the proprietary avionics went to Thales, thus the loss of the LRU overhaul.
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Sounds like NW was at one end of the spectrum while US has shifted to the other end, farming out a lot of the things you mentioned and others to either the manufacturer of the component or a specialized shop. For example, US has "power by the hour" contracts with the manufacturer for engines.
Jim
Jim
AA announced in the 1998 annual report that the planned early retirement of eight DC-10s and two 727s in 1999 prior to heavy checks would save about $40 million in maintenance costs, or about $4 million each.
Dont mind him, he is getting desperate so he's making stuff up to boost his arguement. What does he have to lose? He can always make up a new alias.
AA lists their costs at an average of around $27/hr.
Several thousand mechanics?? NWA tried that a few years back, they couldnt get all they needed. The FAA has only been issueing around 6000 new certs a years for the past 8 years. They aint out there anymore.
And they probaly wrote it off as a $50 million loss.
There's only one person here making things up to support their argument, and that's you. From the very first post in this thread to the above. I'm not the one constantly complaining that my wage negotiations have been fruitless for the past 25 years; you have. Perhaps there's a connection?
So if WN advertised several thousand openings at their current wage ($43/hr plus benefits), you don't think that aviation maintenance schools wouldn't see their enrollments spike overnight? How many years of training does it take to be ready to acquire your licenses? My guess is that if WN put the word out that they wanted to add several thousand mechanics jobs at about $90,000 each, the schools would fill to overflowing. But you may be right - maybe nobody would enroll in training so they could make $90k for WN.
According to the FAA, there's no shortage of schools willing to train mechanics:
http://av-info.faa.gov/MaintenanceSchool.asp
Do you think it's possible that not many young people are pursuing aviation maintenance as a career because airlines have not been hiring mechanics in large numbers for many, many years? Professions and occupations that are growing have been minting many new graduates, like, say, nursing. Aircraft mechanics, not so much.
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Or maybe because of the information age we live in, young people are more aware of wha has happened to the aircraft mechanic profession and how airlines are turning it into nothing better than the Jiffy Lube job up the road.
When I started in this business, it was something to be proud of working as a mechanic for an airline. Even working nights, weekends and holidays was a non issue because of the pay and benefits.
Do you really expect any person, let alone a young one, to be content and willing and eager to work nights for $.01 and hour?
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