Bucking Trend, Airline Keeps Repairs In-House
Third in a three-part series
As more and more major U.S. airlines shift their repair and maintenance work to outside firms ��� often in foreign countries — American Airlines is taking a different approach.
Instead of outsourcing its airplane maintenance to Mexico and South America, American is sticking with its own crew of 6,000 mechanics based in Tulsa, Okla., to service its fleet. This "insourcing" strategy also allows American to contract with other airlines and freight companies to service their planes.
Facing intense competition from foreign maintenance companies, American and its mechanics have collaborated to cut the time and number of workers needed to complete a major overhaul called a "heavy check" — during which mechanics strip the interior of the plane all the way down to the skeleton. The overhaul now takes 12 days instead of 22, and a little more than 300 workers, down from 700.
Troy Sokolowski, who oversees the airline's MD-80 major repairs, gives much of the credit to his mechanics.
"Why it's such a huge success is because we had people off the floor — who actually do the job — who said this is how we could do it and we can do it more efficiently, and we can do it better," he says.
Two-Week Turnaround
American has agreed not to lay off the mechanics freed up by the efficiencies. Instead, it's bringing in business from other airlines and freight companies. On a recent Friday, two of the three positions on American's MD-80 repair line were occupied by aircraft without American's double A on their tails.
But how can this maintenance facility compete? American's mechanics make $32 an hour, plus benefits. Mechanics in Mexico and South America make about a quarter of that.
One way American stays competitive is by getting customers' jets back in about half the time. Instead of having their jets sitting in a foreign hangar for a month or six weeks, American can get the plane back to customers in less than two weeks.
And by repairing existing parts instead of replacing them, American can save its customers thousands of dollars. Senior Vice President Carmine Romano says his mechanics can repair and fabricate almost everything in-house.
"We have a landing-gear shop. We have an engine shop. We have component shops. We have airframe overhaul," says Romano. "So we can do everything right here under one roof."
Open-Mike Fridays
Every Friday, maintenance management, the union and the mechanics have a standing meeting on the hangar floor. First, the mechanics get a report card from managers on how they did that week. But the accountability works both ways: The union also gets to take control of the microphone in these meetings to speak directly to management and to communicate with the mechanics.
Both American Airlines' executives and the mechanics say these regularly scheduled forums reduce antagonism. While it doesn't look like they're all going out together afterward for Friday happy hour, the atmosphere in these meetings is respectful, even collaborative.
"We're going through a culture change," says Steve Luis, president of the Transport Workers Local 514, which represents the 6,000 mechanics in Tulsa.
Faced with the brutal possibility of losing their jobs forever as they watched what happened to colleagues at other airlines, the union mechanics have given back billions to the company, Luis says. And they've agreed to be held accountable to strict production goals and cost-cutting efforts.
"It's about business savvy, accountability," he says. "Where everybody is going to be accountable for what they do on a day-to-day basis."
Building The Case For Uniform FAA Inspections
It hasn't all been smooth sailing.
Last spring, the FAA forced the cancellation of hundreds of American, Delta and United flights for missing routine inspection deadlines for wire bundles. And this week, American confirmed that it is under investigation for using fasteners not approved by the FAA in the bulkheads of 11 of its MD-80 aircraft.
But the complaint now coming from both American Airlines and the president of the Transport Workers Union is that the FAA needs to give maintenance facilities south of the border the same aggressive inspections they endure in the U.S.
Luis, the union president, says the FAA is looking over American mechanics' shoulders all the time in Tulsa. He wants it to be the same way for their competitors.
Maintenance facilities overseas should "have to go through ... the same scrutiny as a maintenance base in the United States," he says. "[That includes] drug testing, alcohol testing and all the compliance that we have to follow."
American Airlines' executives say that keeping their maintenance in-house is a smarter and safer strategy.
But both the union and American's management say that if other airlines are allowed to escape strict federal oversight of their maintenance operations overseas and pay lower wages, what's left of the domestic repair industry will slowly die.
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MICHELE NORRIS, host:
This is ALL THINGS CONSIDERED from NPR News. I'm Michele Norris in Washington.
MELISSA BLOCK, host:
And I'm Melissa Block at NPR West in California.
First this hour, airline maintenance. Who's doing the work and where? On MORNING EDITION this week, we've heard about U.S. airlines outsourcing repairs to facilities in El Salvador, Costa Rica and China.
Well, now, NPR's Wade Goodwyn is going to tell us about one U.S. carrier that's bucking the trend. American Airlines is betting big on its repair shop in Tulsa, Oklahoma.
WADE GOODWYN: Drive through the gates of American Airlines' maintenance facility and in the parking lot is a glimpse of a bygone era. Liberally sprinkled among the SUVs and the pickup trucks are toys for working-class boys: gleaming Harley Davidsons, the flash of their polished chrome reflecting the Tulsa sun. Inside the massive hangars are some of the best trained airplane mechanics in the world.
(Soundbite of machinery)
Mr. TROY SOKOLOWSKI: When the airplane comes in position one, all the bins will come down, seats will come out, the majority of the floorboards will come out, the galleys will come out, the lavatories will come out.
GOODWYN: Troy Sokolowski oversees American Airlines' MD-80 major repairs. Facing intense competition from foreign maintenance companies, American and its mechanics have collaborated to cut the time it takes to do what is called a heavy check from 22 days to 12. And instead of 700 mechanics to do the job, it's down to a little over 300. Sokolowski is management, but he gives much of the credit to his mechanics.
Mr. SOKOLOWSKI: And why it's such a huge success is because of the fact that we have people off the floor that actually do the job, that came together and said, hey, this is how we can do it. We could do it more efficiently and we could do it better.
GOODWYN: American has returned the favor by agreeing not to lay off any of the mechanics that were freed up by the efficiencies. Instead of outsourcing, American is insourcing, contracting with other airlines and freight companies, servicing their airplanes with American Airlines mechanics. On this sunny Friday, two of the three positions on American's MD-80 repair line are occupied by aircraft that don't have the double A on the tail. Carmine Romano is the senior vice president at American in charge of maintenance and engineering.
Mr. CARMINE ROMANO (Senior Vice President, American Airlines): Our goal is to try to be competitive in the marketplace.
GOODWYN: But how can they compete? American's mechanics make $32 an hour, plus benefits. Mechanics in Mexico and South America make about a fourth of that. Well, one way is by getting your jet back into revenue production in about half the time. Instead of having your jet sit in a hangar for a month or six weeks, American can do it in 13 days. And by repairing existing parts instead of replacing everything brand new, American can save its customers thousands on a heavy check. Romano says his mechanics repair and fabricate almost everything in-house.
Mr. ROMANO: We have a landing gear shop. We have an engine shop. We have component shops. We have airframe overhaul. So, we can do everything right here under one roof.
(Soundbite of hangar)
Unidentified Man #1: Could I have your attention, please? Let's get rolling and get right on step.
GOODWYN: Every Friday, management, the union and the mechanics have a standing meeting on the hangar floor. First, the mechanics get a report card from managers on how they did that week.
Unidentified Man #1: We're trending in the right direction as far as cost is concerned.
GOODWYN: But the accountability works both ways. The union also gets to take control of the microphone in these meetings to speak back to management and communicate with their mechanics.
Unidentified Man #2: We have no new grievances on any of hangar 1, three grievances in work on 1D.
GOODWYN: Both American's executives and the mechanics say these regularly scheduled communication forms inhibit the antagonism that can all too easily flow both ways. While it doesn't look like they're all going out for Friday happy hour together, the atmosphere in this meeting is respectful, collaborative, even.
Mr. STEVE LUIS (President, Transport Workers Local 514): We're going through a culture change.
GOODWYN: Steve Luis is president of the Transport Workers Local 514, and represents 6,000 mechanics in Tulsa. Faced with the brutal possibility of extinction as they watched their colleagues at other airlines lose their jobs forever, the union has given back billions to the company.
Mr. LUIS: It's about business savvy, accountability, where everybody is going to be accountable for what they do on a day-to-day basis.
GOODWYN: It hasn't all been smooth sailing. Last spring, the FAA forced the cancellation of hundreds of flights for problems with wire bundles inspections. And this week, American Airlines confirmed that the FAA is investigating problems with substandard fasteners in the bulkheads of 11 of American's jets. But the complaint now coming from both American Airlines and the president of the Transport Workers Union is that the FAA needs to give maintenance facilities south of the border the same aggressive inspection they endure in the U.S.
Mr. LUIS: They have to go by the same scrutiny that a maintenance base in the United States: drug testing, alcohol testing and all the compliance that we have to follow.
GOODWYN: Luis says if the airlines are allowed to escape strict federal oversight of their maintenance operations and pay lower wages on the bargain, the union and what's left of the domestic repair industry will slowly die. For their part, American executives say they believe having their maintenance in-house is going to prove to be both a smarter and a safer way to go.
Wade Goodwyn, NPR News, Dallas. Transcript provided by NPR, Copyright National Public Radio.
