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Topic: AA To Outsource Widebody Maintenance To HKG
Username: Independence76
Posted 2012-09-14 00:22:50 and read 17835 times.

Last week, I was working near the AA Pilot Academy when an AA maintenance employee came for a visit with his sons. I struck up a friendly conversation with him about the bankruptcy and maintenance facilities affected in regards to it.

However, once I mentioned how it was "sad" that the Alliance maintenance facility was being closed and all of those jobs were to be lost, he seemed to give me a piece of his mind. He claimed that Alliance "wasted time" and "did nothing" while draining AA billions a year by "looking at planes and then just sending them off to Tulsa for the actual job."

It was clear I struck a nerve, considering he used the terms "f***ing s***" in front of his sons.

After this mini-rant, I asked of the future of widebody maintenance for AA. He openly claimed:

"We're going to send out 777's to Hong Kong for outsourced maintenance starting in November."

He continued to praise AA management for making this move and mentioned that his job would not be affected directly.


Can anyone confirm this as a possibility, or is he just talking about another "rumor he heard" in the office?

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

[UPDATE - CONFIRMED]

http://www.nbcdfw.com/news/business/...e-Jobs-to-Hong-Kong-169406676.html

[Edited 2012-09-14 00:45:37]

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: thegreatRDU
Posted 2012-09-14 04:47:47 and read 17466 times.

Nice! A huge step in the right direction and a step towards consistent profitability...

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: aquariusHKG
Posted 2012-09-14 05:31:14 and read 17329 times.

While they're at it, maybe consider start a route to HKG   

[Edited 2012-09-14 05:32:38]

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: jfk777
Posted 2012-09-14 06:04:08 and read 17186 times.

The preferred option would be for the 777 jobs to stay in the USA. Haeco is a first class outfit closely alligned with Cathay Pacific and also owned by the Swire Group which owns Cathay.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: iFlyLOTs
Posted 2012-09-14 06:47:25 and read 16987 times.

Quoting aquariusHKG (Reply 2):
While they're at it, maybe consider start a route to HKG

Yeah, why fly the flight out there for Mx empty? 

But if what he said regarding the Alliance facility then good for AA in actually making a move that will lose them less money

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: ckfred
Posted 2012-09-14 09:12:07 and read 15648 times.

What is the current breakdown in aircraft maintenance? I was under the impression that all aircraft with RR engines went ot AFW for heavy maintenance, while all other aircraft went to TUL. IIRC, RR had an engine maintenance facility next door to the AA facility.

But, for the sake of argument, couldn't AA do all of their maintenance at TUL? Before AFW opened in the late 1990s, all DC-10s, MD-11s, 767s, and A300s went to TUL for maintenance, just as the entire narrowbody fleet did.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: TJCAB
Posted 2012-09-14 10:00:49 and read 15069 times.

hmm. don't blame the country's leadership when more jobs are being shipped out

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: Independence76
Posted 2012-09-14 11:03:19 and read 14303 times.

My question is, how will AA plan to get the 777's to HKG? Go NRT-HKG after a DFW-NRT, ORD-NRT, or LAX-NRT flight?

[Edited 2012-09-14 11:34:41]

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: LONGisland89
Posted 2012-09-14 11:45:25 and read 13775 times.

Quoting Independence76 (Reply 7):
My question is, how with AA plan to get the 777's to HKG? Go NRT-HKG after a DFW-NRT, ORD-NRT, or LAX-NRT flight?

An empty 77E should be able to fly DFW/TUL/ORD/LAX/JFK-HKG without a fuel stop. That's my guess.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: Birdwatching
Posted 2012-09-14 12:02:28 and read 13531 times.

Quoting Independence76 (Reply 7):
My question is, how will AA plan to get the 777's to HKG? Go NRT-HKG after a DFW-NRT, ORD-NRT, or LAX-NRT flight?

Maintenance at a remote location can not be combined with revenue flights. You need the plane there for the flight back home.

Soren   

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: RDH3E
Posted 2012-09-14 12:05:56 and read 13510 times.

Quoting Birdwatching (Reply 9):
Maintenance at a remote location can not be combined with revenue flights. You need the plane there for the flight back home.

The first plane to get there couldn't, but in theory, you could cycle a plane into Mx with a revenue flight if there was another frame exiting Mx that could pick up the return leg. That would depend on have a steady flow of A/C, but it could be done occasionally.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: B2443
Posted 2012-09-14 12:06:53 and read 13478 times.

Quoting TJCAB (Reply 6):
hmm. don't blame the country's leadership when more jobs are being shipped out

and don't blame the Chinese for taking those jobs.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: Independence76
Posted 2012-09-14 12:09:01 and read 13441 times.

Quoting Birdwatching (Reply 9):
Maintenance at a remote location can not be combined with revenue flights. You need the plane there for the flight back home.

Can't the 777's be organized accordingly once HKG maintenance begins?

A stop in NRT to let off passengers, and then a ferry flight to HKG? I can't imagine the pilot's union to have a liking towards 12-hour flights going empty.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: JAAlbert
Posted 2012-09-14 12:10:36 and read 13400 times.

Some harsh words towards Alliance. I am disappointed hearing jobs are being lost to Asia - is there no suitable domestic company available? What does it cost in fuel and staff to fly an empty plane 6000 miles for maintenance?

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: Independence76
Posted 2012-09-14 12:15:32 and read 13321 times.

Quoting JAAlbert (Reply 13):
What does it cost in fuel and staff to fly an empty plane 6000 miles for maintenance?

I can imagine it would cost substancially less when passengers are flown at least part of the way.

It only makes sense for the ferry flights to go from PEK-HKG, NRT-HKG, or PVG-HKG, and then back to whatever Asian location that is on plan in order to pick up passengers for flights back to DFW, LAX, or ORD.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: CALPSAFltSkeds
Posted 2012-09-14 14:51:25 and read 11243 times.

Ferrying HKG-NRT (or elsewhere in Asia) can be problematic and coordination is needed to make sure the airplane coming out of MX is all ready to go or there will be a delay in the NRT-US flight. You also have pilots positioning and if the MX aircraft is delayed, you have real problems. Additionally, positioning the next aircraft in NRT has to match the completed unit - a delay be a day can mean the next aircraft into NRT is the wrong aircraft.

Also, I understand that service into HKG requires some type of permit unless your airline has regular service with that type of aircraft.

It is much cleaner and w/o headaches/coordination to just ferry the aircraft to the US and consider the cost as part of the savings of having the work done in HKG. Additionally, the permit probably require pilots to match the permit.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: N243NW
Posted 2012-09-14 15:37:20 and read 10542 times.

Quoting ckfred (Reply 5):
What is the current breakdown in aircraft maintenance? I was under the impression that all aircraft with RR engines went ot AFW for heavy maintenance, while all other aircraft went to TUL. IIRC, RR had an engine maintenance facility next door to the AA facility.

All RR engines go to AFW for heavy maintenance at the facility (TAESL), and this facility will remain in operation for the foreseeable future. The only work that AFW currently sees is the 767 and 777 heavy maintenance, and this is the work that will be reshuffled from that base.

Quoting JAAlbert (Reply 13):
Some harsh words towards Alliance.

And much of it is hyperbole or complete falsification. Sure, there are some uncompetitive work rules, and any group of such a size is bound to have some bad apples, but much of what the OP's friend said is not true. I haven't heard of a single aircraft lately get ferried from AFW to TUL for the "actual job." In fact, TUL hasn't even seen a 777 in close to a year, if not several years.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: vv701
Posted 2012-09-14 15:44:22 and read 10426 times.

It is possible that the maintenance will be outsourced to SIN and not HKG. HAECO - Hong Kong Aircraft Engineering Company Limited, as mentioned above a Swire Group company connected to AA through CX and oneworld - operates at both HKG and SIN. The linked article added by the thread opener says:

"Pike, who has been briefed on the airline's plans, said work on Boeing 777 jets, which is now done at Alliance, will go to a Hong Kong company called Haeco."

The article's author may have assumed that because HAECO is a Hong Kong company that the work will be carried out at HKG. I am suggesting that it might be SIN as when BA was short of engineering capacity back in May they ferried a 744, G-BYGA, to HAECO in SIN for heavy maintenance. It left LHR on 26 May and returned from SIN on 7 July.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: Viscount724
Posted 2012-09-14 16:08:13 and read 10006 times.

Quoting jfk777 (Reply 3):
Haeco is a first class outfit closely alligned with Cathay Pacific and also owned by the Swire Group which owns Cathay.

Swire is the largest single shareholder but they only own 45% of CX. They own 75% of HAECO. Corporate profile dated this month.
http://www.swirepacific.com/eng/abou...filepresentation/profile201209.pdf

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: Roseflyer
Posted 2012-09-14 16:13:44 and read 9919 times.

Quoting RDH3E (Reply 10):
Quoting Birdwatching (Reply 9):
Maintenance at a remote location can not be combined with revenue flights. You need the plane there for the flight back home.

The first plane to get there couldn't, but in theory, you could cycle a plane into Mx with a revenue flight if there was another frame exiting Mx that could pick up the return leg. That would depend on have a steady flow of A/C, but it could be done occasionally.

One big problem is you don't know exactly when the airplane will come out of maintenance. It is easy to schedule it in, but checks often don't finish exactly on time. For C checks, if an airplane has some serious findings, it can take a while to repair or the airplane risks coming out of maintenance with a long list of deferred items which also hurts the schedule.

It is easiest to put the airplane to the nearest airport that has some schedule slack. NRT might have enough. Otherwise to reduce the risk of hurting the schedule, ferrying all the way back to ORD or LAX might be the best.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: NorthstarBoy
Posted 2012-09-14 16:19:09 and read 9806 times.

Too bad.

Then again, in today's world, it's all about the quick buck. Instead of paying a US based mechanic 50 dollars an hour, plus benefits, management would rather pay a chinese mechanic 10 dollars an hour to do the same work and stuff the difference back into their pockets.

I'm also kind of ashamed of the union for agreeing to this, then again, what am i talking about? Since AA is in BK, the unions are pretty much powerless to stop management from doing whatever it wants.

Honestly, this outsourcing has got to stop, but the only way that's going to happen is if the FAA issues a rule that *all* heavy maintenance done on US registered passenger aircraft *must* be done by US based FAA certified mechanics.

And I'm not questioning the quality of the work done, CX is one of the world's best airlines so I'm sure they wouldn't entrust their aircraft to a third world chop shop that doesnt use brand new, out of the box OEM parts. What I'm questioning is the toxic mentality within airline management circles that it's easier to throw away American jobs than to do the right thing, keep your maintenance right here and keep Americans employed.

Then again, what am I thinking again, there is no such thing as national pride or loyalty anymore. All loyalty is to the buck and how to make more of them faster.

IMO there's something wrong with that mentality.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: Viscount724
Posted 2012-09-14 16:35:22 and read 9519 times.

Quoting vv701 (Reply 17):
It is possible that the maintenance will be outsourced to SIN and not HKG. HAECO - Hong Kong Aircraft Engineering Company Limited, operates at both HKG and SIN.

Their operation in SIN is technically a separate company known as SHAECO, wholly-owned by HAECO. I think it was mainly set up to handle line maintenance. Doubt it has the facilities to handle heavy maintenance for a large 777 fleet like AA's. That type of work is normally done in HKG.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: commavia
Posted 2012-09-14 16:39:16 and read 9443 times.

Quoting NorthstarBoy (Reply 20):
Then again, in today's world, it's all about the quick buck. Instead of paying a US based mechanic 50 dollars an hour, plus benefits, management would rather pay a chinese mechanic 10 dollars an hour to do the same work and stuff the difference back into their pockets.

I find it amazing that you honestly think executives are somehow screwing the little guy and outsourcing just so they can "stuff the difference back into their pockets." The reality, of course, is that they are doing it because they have no choice if they want their airline to remain competitive. Executives of publicly-traded corporations have one singular foremost fiduciary responsibility: deliver value to shareholders. If every other airline is delivering relatively more value to shareholders through outsourcing, how is AMR management going to explain and justify why they aren't?

The harsh reality is that the reason airlines have been able to so relatively easily outsource overhaul maintenance to foreign countries is because customers see no loss of value in it. In any economic transaction, it's all about how both sides perceive the value, and in the airline overhaul market, U.S. mechanics unions have thus far failed to demonstrate why it is that passengers should pay more to fly on a plane maintained in the U.S. Is the plane safer? Are the parts better? The mechanics better trained and/or more experienced? Maybe all of the above. But consumers don't seem to think so.

For the last decade consumers have spoken loud and clear with their dollars and, by and large, thought absolutely nothing of putting themselves and their children on planes maintained in foreign countries by foreign mechanics. Would you honestly argue that AA has benefited by any material amount solely because their 767s are overhauled in Fort Worth as opposed to Hong Kong, their 737s in Tulsa as opposed to El Salvador? Of course not. The (sad, to some) truth is that virtually nobody cares because the planes aren't falling out of the sky, and in fact statistically aviation appears - at least appears - to be getting continuously, progressively, safer.

Coming back to my earlier point, until that changes, and consumers are willing to pay more for a ticket solely to fly on a plane maintained in the U.S., there will be no economic justification for a management team to explain to shareholders why they are paying more to do overhauls in-house.

Quoting NorthstarBoy (Reply 20):
Honestly, this outsourcing has got to stop, but the only way that's going to happen is if the FAA issues a rule that *all* heavy maintenance done on US registered passenger aircraft *must* be done by US based FAA certified mechanics.

Why stop there? Why not outlaw the outsourcing of everything? Sure, the price of everything in our lives will increase to the point that nobody can afford it, but we'll all have "American" jobs, right? This little game can be played in both directions.

Quoting NorthstarBoy (Reply 20):
What I'm questioning is the toxic mentality within airline management circles that it's easier to throw away American jobs than to do the right thing, keep your maintenance right here and keep Americans employed.

Economics would argue that the "right thing" to do would be to allocate resources as efficiently as possible, thus freeing up capital to be allocated elsewhere in the economy to create jobs in areas where the U.S. has a comparative economic advantage. The U.S., in general, has a comparative economic advantage in many things, but very unfortunately for a lot of good, hard-working people, civil aviation overhaul maintenance is no longer one of them.

[Edited 2012-09-14 16:39:51]

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: Deltal1011man
Posted 2012-09-14 20:27:45 and read 6640 times.

Quoting Independence76 (Thread starter):
However, once I mentioned how it was "sad" that the Alliance maintenance facility was being closed and all of those jobs were to be lost, he seemed to give me a piece of his mind. He claimed that Alliance "wasted time" and "did nothing" while draining AA billions a year by "looking at planes and then just sending them off to Tulsa for the actual job."

He is an idiot flat out. that is one of the bigger lies i have ever heard.

Quoting Independence76 (Thread starter):
He continued to praise AA management for making this move and mentioned that his job would not be affected directly.

and hopefully he will end up on the street where he belongs. smh

Quoting N243NW (Reply 16):

And much of it is hyperbole or complete falsification. Sure, there are some uncompetitive work rules, and any group of such a size is bound to have some bad apples, but much of what the OP's friend said is not true. I haven't heard of a single aircraft lately get ferried from AFW to TUL for the "actual job." In fact, TUL hasn't even seen a 777 in close to a year, if not several years.

Thats because its horse poo.

Quoting NorthstarBoy (Reply 20):
I'm also kind of ashamed of the union for agreeing to this, then again, what am i talking about? Since AA is in BK, the unions are pretty much powerless to stop management from doing whatever it wants.

I'm not. TWU members should have shot it down just like the APA did. Now they get to live with this crappy contract for 6 years.

Quoting NorthstarBoy (Reply 20):

Honestly, this outsourcing has got to stop, but the only way that's going to happen is if the FAA issues a rule that *all* heavy maintenance done on US registered passenger aircraft *must* be done by US based FAA certified mechanics.

or give unions the power to walk once a judge toss out a contract. (or stop letting companies go BK just to screw labor like American has done)

Quoting commavia (Reply 22):
I find it amazing that you honestly think executives are somehow screwing the little guy and outsourcing just so they can "stuff the difference back into their pockets."

uhhh wait. Horton I believe(without a merger) is going to get a very large bonus once they exit BK.....hmmm wonder where the money will come from. magic I suppose.   (and yes...we all know you'll be loving every second of it)

Quoting commavia (Reply 22):
The reality, of course, is that they are doing it because they have no choice if they want their airline to remain competitive.

wait a second....Didn't they go into BK with 4B in cash, and over the time of BK they have had profitable months AND increased there cash on hand to 5B? (along with a very large aircraft order and complete hard product overhaul)
your constant PRs are cute....really they are....but GMAFB.  
Quoting commavia (Reply 22):

Why stop there? Why not outlaw the outsourcing of everything? Sure, the price of everything in our lives will increase to the point that nobody can afford it, but we'll all have "American" jobs, right? This little game can be played in both directions.

Yes, having air fare that is paid that pays the cost of running the airline, vs coming back to the employees for money every ~10 years would be a great thing.

Quoting ckfred (Reply 5):

767 and 777 work. Some will move to TUL and DWH and some moved to China

Quoting TJCAB (Reply 6):

I do. Some presidents talk about adding jobs and now more jobs will go over seas.
You know, If you look at the big three(DL/UA and AA) If the government put a stop to this crap it would likely add 20-30K jobs. Sad.

Quoting Independence76 (Reply 7):

fly them empty. Delta send 767 to HKG for MX via ANC and NRT(IIRC)

Quoting Birdwatching (Reply 9):

and good planning, and more importantly good work, it can be done. (but i wouldn't expect that in this case.

Quoting JAAlbert (Reply 13):

ha....they don't care about cost. Wall street thinks it s the best thing in the world. Its the same reason why you never see plans to get OH cost down. You never see management try to work with employees to get cost down...they just send it out.
Hopefully this will fail for AA as bad as it has for Delta. I don't see the TWU letting AA open its own hangar in mexico to take the work like Delta is having to do.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: bkkair
Posted 2012-09-14 20:46:37 and read 6353 times.

Comments:

1) Is the maintenance done in Hong Kong or China? I can't imagine it being cheaper in HKG than in the U.S. as HKG is one of the most expensive places in the world, unless the union contracts in the U.S. were so expensive. Still, with bankruptcy, AA could pay their U.S. mechanics less than HKG wages.

2) Outsourcing works both ways.There is more and more outsourcing of jobs from other countries to the "low-cost" U.S.A.

As an example, the majority of CX pilots and flight attendants (those flying routes to the U.S.) are American, not from Hong Kong. I surmise that U.S. piilots and flight attendants work for less money than those from Hong Kong.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: Bobloblaw
Posted 2012-09-14 20:56:17 and read 6380 times.

Quoting Independence76 (Thread starter):
while draining AA billions

Probably a bit overstated

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: BlueJuice
Posted 2012-09-14 21:23:57 and read 6033 times.

This is the reality of a global economy. The ones that shout loudest about "supporting the American worker" are often quietest when the airlines that employs Americans have fares $5 more than the one that outsource offshore. Seems every year there is some "shocking expose" about airlines like WN sending their planes to El Salvador to be serviced by Aeroman. The reports imply WN planes may be unsafe because they are being serviced by lower pay and alleged undertrained technicians. Message boards get covered with outrage and righteous indignation as people condemn WN and promise to only fly on airlines with planes serviced in the US. As we know WN planes are safe and not falling out of the sky. Within days, the furor dies as we are riveted by the latest news of Lindsey Lohan getting drunk and passing out on a sewage grate outside some club in LA. The same people who claim they "support the American worker" are back on WN flights because AA was a few bucks more. Face it, we Americans are hypocrites and don't give a flying patootie who services the plane as long as the flight is cheap.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: trex8
Posted 2012-09-14 21:33:52 and read 5968 times.

Quoting NorthstarBoy (Reply 20):
What I'm questioning is the toxic mentality within airline management circles that it's easier to throw away American jobs than to do the right thing, keep your maintenance right here and keep Americans employed.

The primary function of publicly owned corporations is to maximize profit for their shareholders, not simply act as job creators.

Quoting bkkair (Reply 24):
1) Is the maintenance done in Hong Kong or China? I can't imagine it being cheaper in HKG than in the U.S. as HKG is one of the most expensive places in the world, unless the union contracts in the U.S. were so expensive. Still, with bankruptcy, AA could pay their U.S. mechanics less than HKG wages.

HKG is not expensive compared to the US unless you want to live as a westerner. Live as a local and I'm sure that Haeco worker is making less than his US counterpart- direct salary and fringe benefits.

Quoting bkkair (Reply 24):
As an example, the majority of CX pilots and flight attendants (those flying routes to the U.S.) are American, not from Hong Kong. I surmise that U.S. piilots and flight attendants work for less money than those from Hong Kong.

While the majority of all CX pilots are expatriate (a legacy of it really being as they used to advertise - a HK based British airline) I seriously doubt the majority of FA on US routes are American. Expat pilots get paid more and better benefits than local HK pilots. You won't find enough locals to fly one of CXs subfleets let alone the whole fleet! HK isn't that big and aviation training has not till very recently been exactly a major focus for local schools, not in 2012 anyway. Maybe in another decade or two there will be enough locals to do without expats.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: Independence76
Posted 2012-09-14 21:40:26 and read 5896 times.

Quoting Deltal1011man (Reply 23):
He is an idiot flat out. that is one of the bigger lies i have ever heard.

He certainly was annoyed by my merciful comments towards Alliance. He looked me in the eye afterwards and said those things like he was trying to burn me. I felt like I didn't do anything, nor do I actually know a lot of about AA maintenance. Made me feel like the little guy.

I'm not entirely sure what he was saying when he went further down the hall, but I think he was telling his sons how "idiotic" my comments appeared to be. I can't confirm this, but that's what I think I heard.

[Edited 2012-09-14 21:41:36]

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: LAXintl
Posted 2012-09-14 21:58:48 and read 5801 times.

I posted some outsourcing details in the AA BK thread. In order to avoid cross posting I wont repeat it here.

As far as getting an aircraft halfway around the world to HKG, its hardly much of an issue if it needs to be ferried. Airlines do so all the time. Cost is baked into the analysis in considering various vendors.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: crAAzy
Posted 2012-09-14 23:03:12 and read 5192 times.

Well this shouldn't come as a surprise for the 777s given AA's close relationship with CX and CX's experience with the airplane. Additionally, I presume this will include all the 777 refurbs which will include the new CX style J seats and changes in Y cabin to include Y+.

The 767s are a bit more puzzling to me though. I wonder if we might see AA start up a transpac 767 route to somewhere to help with ferrying costs?

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: seabosdca
Posted 2012-09-14 23:35:40 and read 4875 times.

Quoting commavia (Reply 22):
I find it amazing that you honestly think executives are somehow screwing the little guy and outsourcing just so they can "stuff the difference back into their pockets." The reality, of course, is that they are doing it because they have no choice if they want their airline to remain competitive.

Let's be realistic, not willfully blind. It's both. You can't seriously claim that corporate executives, especially those at AA, have an angelic history of selfless devotion to their fiduciary duties, or that their pay is just the going market rate for leadership talent. Of course they need to reduce mx costs to be competitive, but they have repeatedly proven that if they have half an opportunity to siphon yet more money out of the company -- even while cutting everyone else's compensation -- they'll jump on it.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: skipness1E
Posted 2012-09-14 23:55:35 and read 4768 times.

Virgin Atlantic have their maintenance for the A340-600s done in Manila. They are ferried and swapped over using the daily LHR-HKG-SYD operation. It's not uncommon.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: Deltal1011man
Posted 2012-09-15 00:46:37 and read 4425 times.

Quoting bkkair (Reply 24):

1) Is the maintenance done in Hong Kong or China? I can't imagine it being cheaper in HKG than in the U.S. as HKG is one of the most expensive places in the world, unless the union contracts in the U.S. were so expensive. Still, with bankruptcy, AA could pay their U.S. mechanics less than HKG wages.

Eh, I think the number I heard being tossed around was 15-20% saving. (again, something, IMO, that could be fixed if American would....gasp.....work with its employees)
But, once they cost to much they will move the work. Look at Delta, they dumped HMVs in BK and have had two vendors (for 757/767) and is to the point of building its own hangar in Mexico.

Quoting BlueJuice (Reply 26):
The reports imply WN planes may be unsafe because they are being serviced by lower pay and alleged undertrained technicians.

......who missed cracking, and not little cracking, like losing panels cracking. Just sayin.

Quoting crAAzy (Reply 30):

*sigh* this more than likely has a lot more to do with HEACO opening up more hangars (and likely Delta taking its 67 work to its own hangar in Mexico) than CX/AA. I do wish however that what you said meant anything at all. If it did then maybe Delta would be doing its own RR Trent 800 overhauls vs.....sending them to American(who isn't in SkyTeam and competes with Delta...)

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: BlueJuice
Posted 2012-09-15 01:12:52 and read 4393 times.

Quoting Deltal1011man (Reply 33):
......who missed cracking, and not little cracking, like losing panels cracking. Just sayin.

And 6 months before the WN incident at Yuma, an AA 752 depressurized after a hole opened up near the 1L door. I'm an AA EXP and have been for the last 6 years and will be an EXP in the coming year. I am by no means a WN fan and do not fly them. Just telling it like it is. AA was faced with the business reality that the average pax does not give a darn about anything other than price. If people truly cared about what country the plane received it's heavy maintenance in, AA would be the number one. It's a race to the bottom brought on by the passengers and AA is simply complying with what the market wants.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: commavia
Posted 2012-09-15 04:17:49 and read 4243 times.

Quoting Deltal1011man (Reply 23):
Horton I believe(without a merger) is going to get a very large bonus once they exit BK.....hmmm wonder where the money will come from.

We have no idea what Horton will or won't get, but either way, it has nothing to do with this, which was almost certainly inevitable anyway once Delta, Northwest, United and USAirways, to say nothing of JetBlue, Southwest, etc. all went the same direction. That's not "executive greed" - that's just economics.

Quoting Deltal1011man (Reply 23):
wait a second....Didn't they go into BK with 4B in cash, and over the time of BK they have had profitable months AND increased there cash on hand to 5B? (along with a very large aircraft order and complete hard product overhaul)

And? What does having several billion in cash have to do with AMR's inability to effectively restructure its costs and union contracts?

Quoting Deltal1011man (Reply 23):
Yes, having air fare that is paid that pays the cost of running the airline, vs coming back to the employees for money every ~10 years would be a great thing.

Well good luck just continually raising fares in order to cover continually rising costs. Hasn't seemed to work in the airline industry in the last 30 years. That's reality. But, interestingly, one of the things that has helped the bankrupt legacy carriers in that regard in the last decade has actually been the loosening of scope restrictions and the advent of large RJs, which have allowed them to maintain frequency while cutting capacity, thus boosting yields.

Quoting Deltal1011man (Reply 23):
You never see management try to work with employees to get cost down...they just send it out.

AMR has kept overhauls in-house for nearly a decade in the face of the industry trend away from it. They tried. I'm sure they haven't tried perfectly - and I know there has been plenty of mismanagement and stupidity, but either way, it didn't work, and I doubt it ever could or would have. In the end, economics prevail, as they always do - nobody was willing to pay more for the plane maintained in the U.S.

Quoting Deltal1011man (Reply 23):
Hopefully this will fail for AA as bad as it has for Delta.

Yeah - it's failed so badly for Delta that they are generating the best margins in the industry.   

Quoting seabosdca (Reply 31):
You can't seriously claim that corporate executives, especially those at AA, have an angelic history of selfless devotion to their fiduciary duties, or that their pay is just the going market rate for leadership talent.

Of course not - I was not intending to dispute that management acts in their own self-interest. Of course they do.

But that doesn't necessarily equate to greed - just fulfilling their fiduciary responsibility to keep their companies competitive. Management's interests are to do what is necessary to maximize shareholder value. If they don't do that, they won't be "siphoning millions" and getting "bonuses" for long. It's no different than unions, which also acted blatantly in their own economic self-interests (or those of their members). That's the way it's supposed to work. Acting out of self-interest is what drives the economy.

[Edited 2012-09-15 04:21:28]

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: LMP737
Posted 2012-09-15 07:57:12 and read 4022 times.

Quoting NorthstarBoy (Reply 20):
Then again, in today's world, it's all about the quick buck. Instead of paying a US based mechanic 50 dollars an hour, plus benefits, management would rather pay a chinese mechanic 10 dollars an hour to do the same work and stuff the difference back into their pockets.

The mechanics at AA do not make anywhere near that amount. Only one's even close to that are at UPS, Fed Ex and SWA.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: LMP737
Posted 2012-09-15 08:28:53 and read 3968 times.

Quoting Independence76 (Thread starter):
However, once I mentioned how it was "sad" that the Alliance maintenance facility was being closed and all of those jobs were to be lost, he seemed to give me a piece of his mind. He claimed that Alliance "wasted time" and "did nothing" while draining AA billions a year by "looking at planes and then just sending them off to Tulsa for the actual job."

The biggest problem with AFW was the amount of money owed on it more than anything. I would like to see the gentleman who said AFW drained billions from AA every year back that up with some facts. He also should be careful what he wishes for. The facility he works at may be next. Or it might be his job that gets sent somewhere else.

Quoting Independence76 (Thread starter):
It was clear I struck a nerve, considering he used the terms "f***ing s***" in front of his sons.

That should clue you in as to his mindset.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: strfyr51
Posted 2012-09-15 09:50:44 and read 3827 times.

Quoting bkkair (Reply 24):

Contrary to popular belief, airplanes do NOT leave heavy checks with deferred items. UAL has outsourced for a. Long time now and this is a policy I'm almost sure American will adopt. It makes financial and operational sense
If AMR flies the airplane into NRT,, the ferry cost can be minimal. I don't know if AA has engineering test pilots but they wouldy re-deliver the airplane back to the NRT gate thus saving the expense of displacing Line Pilots.. If in fact AMR has no USA HKG route authority..

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: JohnClipper
Posted 2012-09-15 10:16:27 and read 3749 times.

AA doesn't need a route authority. USA-HKG is open skies...

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: MaverickM11
Posted 2012-09-15 10:39:22 and read 3703 times.

Quoting Deltal1011man (Reply 33):
Quoting BlueJuice (Reply 26):
The reports imply WN planes may be unsafe because they are being serviced by lower pay and alleged undertrained technicians.

......who missed cracking, and not little cracking, like losing panels cracking. Just sayin.

The increase in safety in the US airline industry is directly proportional to the amount of offshoring of mx being done. I'm not saying one causes the other, but the scaremongering gets harder to do with each additional record year of safe operations.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: airbazar
Posted 2012-09-15 11:17:16 and read 3636 times.

Quoting JAAlbert (Reply 13):
What does it cost in fuel and staff to fly an empty plane 6000 miles for maintenance?

Can't cost that much. MRO at some far off location is nothing new. And it's not all going to Asia and it sure as hell isn't all about labor costs. For example JL has their 787 MRO done by Lufthansa Technik in Frankfurt and Hamburg. HKG and SIN, two of the world's leading MRO facilities aren't exactly cheap places to live.

Quoting commavia (Reply 22):
U.S. mechanics unions have thus far failed to demonstrate why it is that passengers should pay more to fly on a plane maintained in the U.S.

Why should it be more expensive? Are you telling me that the cost of living in Frankfurt, or Singapore, or Hong Kong is cheaper than it is in Tulsa? It's a pretty difficult argument to make, that somehow US mechanics are better when half the planes flying around aren't even built in the US, and even those that are assembled here have a significant percetage of parts built overseas.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: trex8
Posted 2012-09-15 11:47:54 and read 3538 times.

Quoting airbazar (Reply 42):
Are you telling me that the cost of living in Frankfurt, or Singapore, or Hong Kong is cheaper than it is in Tulsa?

If the workers at both places were expecting the same type of housing, food, health care etc then yes Tulsa may be cheaper but the guy actually holding the wrench in HK or SIN (not the higher level engineer or administrator in the office) is not expecting the same standards as the guy in Tulsa (or FRA). Living as a local in those asian cities and not as an expat his standard of living is lower and his costs are lower than in the US but much higher than comparable MROs in mainland China, Phillipines.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: Valcory
Posted 2012-09-16 02:47:39 and read 3085 times.

Contrary to popular belief, airplanes do NOT leave heavy checks with deferred items

Thats not true it depends on the situation, i have seen airplane leave heavy check with MEL and other deferred items. Sometimes the facilty may not have the parts or equipment to fixed the airplanes. Workloads get deferred so the airplane spent less time in a check.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: musapapaya
Posted 2012-09-16 04:40:51 and read 3020 times.

Quoting skipness1E (Reply 32):
Virgin Atlantic have their maintenance for the A340-600s done in Manila. They are ferried and swapped over using the daily LHR-HKG-SYD operation. It's not uncommon.

Thats true, but VS also send their A343 to Manila straight from the UK (Gatwick or Manchester), so it all depends. VS have lots of their machines looked after by LH Technics, maybe cost down there is even cheaper than HAECO so why AA dont get a contract with them?

LH Technics is a lot more global than the 'much smaller' HAECO!

musapapaya

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: airbazar
Posted 2012-09-16 05:13:47 and read 2981 times.

Quoting trex8 (Reply 43):

If the workers at both places were expecting the same type of housing, food, health care etc then yes Tulsa may be cheaper but the guy actually holding the wrench in HK or SIN (not the higher level engineer or administrator in the office) is not expecting the same standards as the guy in Tulsa (or FRA). Living as a local in those asian cities and not as an expat his standard of living is lower and his costs are lower than in the US but much higher than comparable MROs in mainland China, Phillipines.

As someone who's actually lived in Singapore and has friends currently living in Hong Kong, I can tell you that you are wrong. But this is not the place for this discussion. It's a very different type of living, you're right about that, but it's a different culture too. Don't be deceived by the fact that they live in an small appartment building and take public transportation or taxis to work. Many very rich people live the same way in places like NYC. The point is, if a worker in SIN and HK has a higer salary, which it does, why should maintenance in the US be more expensive? I'll give you a hint: it starts with the fact that in the US health care must be paid for by companies while in other countries health care is paid for by the government. And as long as things stay that way, we wil lcontinue to send work overseas. We can't be competitive with rest of the world if the playing field is not leveled.

Topic: RE: AA To Outsource Widebody Maintenance To HKG
Username: N737AA
Posted 2012-09-18 06:06:08 and read 2392 times.

Quoting crAAzy (Reply 30):
The 767s are a bit more puzzling to me though. I wonder if we might see AA start up a transpac 767 route to somewhere to help with ferrying costs?

The 76's are going to Tulsa and outsourced to a company in Georgia

Quoting Valcory (Reply 44):
Thats not true it depends on the situation, i have seen airplane leave heavy check with MEL and other deferred items. Sometimes the facilty may not have the parts or equipment to fixed the airplanes. Workloads get deferred so the airplane spent less time in a check.

Happens all the time....at AA, been there done that. It is not the preferred option but does happen.

Initially the aircraft will be ferried from US, but eventually it will rotate via NRT/HND.

N737AA


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