I hear you - and certainly there have been no shortage of people over the years who have brought up the downtime argument (i.e., the pure $/man hour savings don't compensate for the quality degradation and transportation time required to/from the third party base).
But, I guess what I keep coming back to is - if it is so clear cut and dry that third party MRO vendors end up costing airlines' more, why is it that every single U.S. airline (to my knowledge - correct me if I'm wrong) except AA has now decided to send their overhauls externally to third party vendors either in the U.S. (and often without unions), or in many cases to foreign stations in lower-cost locations like El Salvador, Mexico, China, Korea, etc.?
Is there something unique about the economics of doing overhauls in Tulsa that doesn't (or actually didn't, past tense) apply in Atlanta, Duluth, Oakland, Tampa, etc.? Do you know something that AirTran, Delta, Continental, Frontier, JetBlue, Southwest, United, etc. don't?
Odd thing is that AA used to be the leader in outsourcing. Over the last few years AA has insourced work instead of outsourcing.
Well I'm not from OH but I can bring up a few.
-Tulsa provides many incentives to AA including cheap rent and equipment purchases
-The AA/TWU contract had SRPs in place since 1995, these lower paid Mechanics gave AA a significant labor cost advantage over competitors who were paying full mechanics rates to guys doing the same work. The SRP changeover was done through attrition so minimal disruption occured.
-Having the majority of their mechanics set in places that are cheap to live (vs UALs SFO base, USAIRs Pittsburg and PHL) allowed AA to gain concessions that other carriers had to go to BK in order to get, in fact we still lead in concessions.
-While AA would claim that AA had a superior pension prior to the wave of bankruptcies in fact it was less, the multiplier was higher but the first year of service was subtracted, that offset any advantage that the higher multiplier provided, another cost savings for AA
-Prior to the wave of Bankruptcies many other competitors provided zero cost medical, workers at AA have been paying since the early 90s.
-Some competitors continue to provide LTD coverage, AA workers have been paying since the early 90s.
-AA currently offers the least amount of sick time, 5 days vs 10 to 12
-AA currently offers at least one week less Vacation regardless of where one falls on the steps, historically they capped out at six weeks while others capped out at 7.
-AA offers the fewest holidays at the lowest rate of 1.5X if worked, essentially if assigned to work the holiday you are paid half pay
-AA facilities are built, paid for
and staffed
So AA had always had, and continues to have advantages over competitors as far as maintenance labor costs. UAL and USAIR are both still engaged in post BK negotiations. It remains to be seen if they adopt now what we gave up 16 years ago in order to compete with AA. UPS mechanics reportedly were looking to bring their OH in house, I beleive contractually it must be done in the US, but were given the choice of $40/hr for bringing that work in or $50/hr to continue to outsource, they chose the $50hr but it gives us more of an idea of the breakeven point.
The fact is that most carriers do maintain a certian amount of OH, UAL still has facilities in SFO, Delta still does OH, even 3P OH, WN Does C checks but not as heavy as AA and I believe USAIR does too.