In the last 10 years, the U.S. airline industry has moved toward less in-house maintenance and more work completed by third-party providers.
Our business plan requires streamlining our maintenance operations and dramatically reducing costs. With the arrival of our new aircraft, our maintenance requirements will decrease. To address these changes, American will now have the ability to outsource up to 35 percent of its aircraft-related maintenance spend (15% of aircraft-related Line Maintenance spend). This aligns our cost structure closer to industry standards while still preserving key in-house maintenance functions.
It’s simply not efficient to have three maintenance and overhaul bases performing work. For this reason, we will be closing our base at Alliance Airport in Fort Worth, Texas by April 2013. Work at Texas Aero Engine Service LLC (TAESL), our joint venture with Rolls-Royce based at Alliance, is anticipated to continue.
We will also be making changes to work rules in a phased approach that would give us the flexibility to operate like a third-party Maintenance, Repair and Overhaul (MRO) facility with a similar cost structure.
The outsourcing of up to 35 percent of our total maintenance spend is still low when compared to others airlines. Southwest outsources 59 percent; US Airways 58 percent; JetBlue 59 percent and United Airlines outsources 48 percent.
Source: DOT Form 41; direct
maintenance airframe and engine repairs as a percentage of total flight
TAESL expense is removed from direct maintenance aircraft engine repair as this
in-house work is reported as outsourced for Form 41 purposes