AMR Bankruptcy and Aircraft Maintenance:
Who is Fixing America’s Planes?

Introduction and Key Findings

In November 2011, AMR – parent company of American Airlines and American Eagle, filed for bankruptcy.  Airline management took this step at a time when the company had $4.1 billion in cash on hand and $13 billion in credit to buy new airplanes.   There was no cash crunch forcing the company to file for relief from its debtors; instead, management identified a reduction in labor costs as the primary motive for seeking a Chapter 11 reorganization.

Will American sacrifice industry leadership?  At present, American is the industry leader in performing aircraft maintenance and overhaul in safe, secure, rigorously inspected U.S. facilities. But management’s singular focus on labor costs, despite billions in savings due to previous union concessions, makes it likely that the company will attempt to use the bankruptcy process to surrender this competitive advantage.

Other carriers have cut jobs and shed maintenance operations during bankruptcy.  Investigations by The National Transportation Safety Board, Frontline, NPR and the Business Travel Coalition have demonstrated the safety and security issues that arise when airlines outsource core maintenance and repair functions.

Hundreds of millions in lost revenue:  In addition to losing control over its own aircraft, this short-sighted strategy will cost American hundreds of million in outside revenue.  TWU mechanics, with a well-earned reputation for quality, have brought significant new business to the company by convincing other carriers hire American to repair and overhaul their aircraft.

The TWU has reviewed government reports, industry data, and company-specific information regarding the impact of outsourcing practices in aircraft maintenance and repair.   The inescapable conclusion is that outsourced maintenance and repair operations, located in the U.S. and overseas, are less safe, less secure, and less well supervised by the Federal Aviation Administration (FAA) than those operated directly by AMR and other carriers.

Read more of this detailed, thought provoking and frightening report by downloading the attachment below.

Attachments:

File
TWU_Aircraft_Maintenance_Jan_2012.pdf