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AA To Outsource Widebody Maintenance To HKG  
User currently offlineIndependence76 From United States of America, joined Jul 2007, 238 posts, RR: 0
Posted (1 year 11 months 1 week 4 days 15 hours ago) and read 17850 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]


"In general, pride is at the bottom of all great mistakes." - John Ruskin
46 replies: All unread, showing first 25:
 
User currently offlinethegreatRDU From United States of America, joined Mar 2006, 2310 posts, RR: 4
Reply 1, posted (1 year 11 months 1 week 4 days 11 hours ago) and read 17481 times:

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


Our Returning Champion
User currently offlineaquariusHKG From Hong Kong, joined Jan 2010, 94 posts, RR: 0
Reply 2, posted (1 year 11 months 1 week 4 days 10 hours ago) and read 17344 times:

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

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

User currently offlinejfk777 From United States of America, joined Aug 2006, 8325 posts, RR: 7
Reply 3, posted (1 year 11 months 1 week 4 days 10 hours ago) and read 17201 times:
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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.

User currently offlineiFlyLOTs From United States of America, joined Apr 2012, 471 posts, RR: 0
Reply 4, posted (1 year 11 months 1 week 4 days 9 hours ago) and read 17002 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



"...stay hungry, stay foolish" -Steve Jobs
User currently offlineckfred From United States of America, joined Apr 2001, 5214 posts, RR: 1
Reply 5, posted (1 year 11 months 1 week 4 days 7 hours ago) and read 15663 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.


User currently offlineTJCAB From Canada, joined Oct 2004, 327 posts, RR: 0
Reply 6, posted (1 year 11 months 1 week 4 days 6 hours ago) and read 15084 times:

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

User currently offlineIndependence76 From United States of America, joined Jul 2007, 238 posts, RR: 0
Reply 7, posted (1 year 11 months 1 week 4 days 5 hours ago) and read 14318 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]


"In general, pride is at the bottom of all great mistakes." - John Ruskin
User currently offlineLONGisland89 From United States of America, joined Jan 2006, 735 posts, RR: 0
Reply 8, posted (1 year 11 months 1 week 4 days 4 hours ago) and read 13790 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.


User currently offlineBirdwatching From Germany, joined Sep 2003, 3818 posts, RR: 51
Reply 9, posted (1 year 11 months 1 week 4 days 4 hours ago) and read 13546 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   



All the things you probably hate about travelling are warm reminders that I'm home
User currently offlineRDH3E From United States of America, joined Mar 2011, 1648 posts, RR: 3
Reply 10, posted (1 year 11 months 1 week 4 days 4 hours ago) and read 13525 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.


User currently offlineB2443 From United States of America, joined Jul 2004, 703 posts, RR: 0
Reply 11, posted (1 year 11 months 1 week 4 days 4 hours ago) and read 13493 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.


User currently offlineIndependence76 From United States of America, joined Jul 2007, 238 posts, RR: 0
Reply 12, posted (1 year 11 months 1 week 4 days 4 hours ago) and read 13456 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.



"In general, pride is at the bottom of all great mistakes." - John Ruskin
User currently offlineJAAlbert From United States of America, joined Jan 2006, 1573 posts, RR: 1
Reply 13, posted (1 year 11 months 1 week 4 days 4 hours ago) and read 13415 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?

User currently offlineIndependence76 From United States of America, joined Jul 2007, 238 posts, RR: 0
Reply 14, posted (1 year 11 months 1 week 4 days 4 hours ago) and read 13336 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.



"In general, pride is at the bottom of all great mistakes." - John Ruskin
User currently offlineCALPSAFltSkeds From United States of America, joined Dec 2006, 2613 posts, RR: 9
Reply 15, posted (1 year 11 months 1 week 4 days 1 hour ago) and read 11258 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.


User currently offlineN243NW From United States of America, joined Jul 2003, 1630 posts, RR: 20
Reply 16, posted (1 year 11 months 1 week 4 days ago) and read 10557 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.



B-52s don't take off. They scare the ground away.
User currently offlinevv701 From United Kingdom, joined Aug 2005, 7461 posts, RR: 17
Reply 17, posted (1 year 11 months 1 week 4 days ago) and read 10441 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.


User currently offlineViscount724 From Switzerland, joined Oct 2006, 25117 posts, RR: 22
Reply 18, posted (1 year 11 months 1 week 4 days ago) and read 10021 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


User currently offlineRoseflyer From United States of America, joined Feb 2004, 9592 posts, RR: 52
Reply 19, posted (1 year 11 months 1 week 4 days ago) and read 9934 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.



If you have never designed an airplane part before, let the real designers do the work!
User currently offlineNorthstarBoy From United States of America, joined Jun 2005, 1825 posts, RR: 0
Reply 20, posted (1 year 11 months 1 week 4 days ago) and read 9821 times:
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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.



Why are people so against low yields?! If lower yields means more people can travel abroad, i'm all for it
User currently offlineViscount724 From Switzerland, joined Oct 2006, 25117 posts, RR: 22
Reply 21, posted (1 year 11 months 1 week 3 days 23 hours ago) and read 9534 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.


User currently offlinecommavia From United States of America, joined Apr 2005, 11523 posts, RR: 61
Reply 22, posted (1 year 11 months 1 week 3 days 23 hours ago) and read 9458 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]

User currently offlineDeltal1011man From United States of America, joined Sep 2005, 9317 posts, RR: 14
Reply 23, posted (1 year 11 months 1 week 3 days 19 hours ago) and read 6655 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.



yep.
User currently offlinebkkair From Thailand, joined Aug 2001, 409 posts, RR: 0
Reply 24, posted (1 year 11 months 1 week 3 days 19 hours ago) and read 6368 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.


25 Bobloblaw : Probably a bit overstated
26 BlueJuice : 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
27 trex8 : The primary function of publicly owned corporations is to maximize profit for their shareholders, not simply act as job creators. HKG is not expensiv
28 Independence76 : 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 bur
29 LAXintl : 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 ar
30 crAAzy : 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 presu
31 seabosdca : 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 hist
32 skipness1E : 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
33 Deltal1011man : 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
34 BlueJuice : 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 las
35 Post contains images commavia : 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 Delt
36 LMP737 : 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.
37 LMP737 : 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 f
38 strfyr51 : 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
39 JohnClipper : AA doesn't need a route authority. USA-HKG is open skies...
40 MaverickM11 : 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 th
41 airbazar : 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. Fo
42 trex8 : 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 holdi
43 Valcory : 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 l
44 musapapaya : 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 loo
45 airbazar : 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 pl
46 N737AA : The 76's are going to Tulsa and outsourced to a company in Georgia Happens all the time....at AA, been there done that. It is not the preferred optio
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