UAL hires two firms to handle repair work
Bloomberg News
UAL Corp.''s United Airlines plans to turn more plane maintenance over to Timco Aviation Services Inc. and ST Mobile Aerospace Engineering Inc., as the world''s second- biggest carrier pares costs, people familiar with the talks said.
Chicago-based United will save $75 million a year as it shifts work from two repair centers closing this month, said Greg Hall, senior vice president of maintenance and engineering. He declined to identify the companies getting the contracts.
Greensboro, N.C.-based Timco and ST Mobile Aerospace, a Mobile, Ala.-based unit of Singapore Technologies Engineering Ltd., will take over additional so-called heavy maintenance work, which entails extensive examination and repair of the airframe, cabin and engines, sources said.
UAL, working to lower its costs as it reorganizes under Chapter 11 bankruptcy protection, is closing maintenance facilities in Oakland, California, and Indianapolis. The airline spent $560 million on maintenance last year, excluding the labor expense associated with it. Total labor
costs, the carrier''s biggest expense, last year were $7.1 billion.
With its new contract work, United will be increasing the amount of maintenance spending with outside companies by 50 percent to $300 million, Hall said.
UAL won the right to outsource more work earlier this year in a new agreement with the International Association of Machinists union. The company negotiated new contracts with all its unions this year, lowering labor expenses by $2.56 billion annually mainly through lower wages and new work rules.
------------------------------------------------------------
We be next