Commercial - TWU, American Airlines Team Up for Tulsa Profit Center

In order to keep American Airlines's MRO work in-house, TWU Local 514 has joined with AA management to achieve $500 million in extra revenues and cost savings at the airline's Tulsa Maintenance & Engineering Base (Tulsa Base). Under the deal, a joint union/management team is working to turn AA's main MRO facility into a profit center by 2006, and to save the base's 7,000 jobs in the process.

Getting together

The union/management cooperation that allowed American Airlines to restructure and survive a few years ago laid the groundwork for the current TWU/AA Tulsa deal. "Once we knew we had a future, we decided that we wanted to continue providing heavy maintenance for our fleet, rather than contract it out to third-party MROs as other airlines had," explained Carmine Romano, AA's vice president for the Tulsa Base. "To do this, we had to find a way to bring our in-house costs down to those offered by third-party MROs."

AA and TWU Local 514 formed a joint leadership team to study the Tulsa Base situation. Staffed by both sides' top executives, "we started looking at ourselves and saying what can we do to stay in aircraft overhaul," said Romano. After six months of analyzing the problem, the team decided that something much bigger in scope was needed to turn the Tulsa Base around.

The result: in a three-day retreat managed by the Overland Consulting Group--called "The Pajama Party" by the participants--the two sides came up "with a vision of where we wanted to be," said Dennis Burchette, president of TWU Local 514. As part of the exercise, Overland Consulting's facilitators challenged both sides to come up with a goal "that was so extreme yet attainable, that it would change the way we currently do business," Burchette said. "That's what spawned the $500 million target."

Strategy

TWU/AA's $500 million strategy is based on saving money and raising revenues. In the first category, "we need to reduce our parts inventory, cut downtime, and get our people working together in a continuous improvement process," said Romano. In the second, AA has entered the third-party MRO marketplace, competing to woo airlines to its facilities in Tulsa, Fort Worth, Texas and Kansas City, Missouri.

To make all of this happen, American has changed the way it manages employees, dropping the usual hierarchical approach in favor of management/union area joint leadership teams. In these teams, representatives from both sides jointly formulate and execute decisions for their specific areas of responsibility. "There's no more management coming in and saying, `Do this!' and the union saying, `Now hang on a minute,'" Burchette said. "Everyone has a say in and a responsibility for how the job is done on the shop floor." Given the tradition of union/management confrontation in industry, learning to work together meant both sides "had to give up the old stereotypes," he added.

Tactics

To achieve the ambitious $500 million goal, the TWU/AA Tulsa team has studied the ways third-party MROs operate. This meant reducing parts inventories, and repairing parts, rather than replacing them. "We have also dramatically reduced our turn times for repair work," said Romano.

The TWU/AA team has changed how the Tulsa Base is staffed, to reduce employee downtime. "In the past, we had each dock manned by a set number of people, no matter how busy it was," said Burchette. Today, Tulsa Base's docks are manned based on workload, with staffing levels being linked to actual workflow demand. "Now every man-hour that we pay for is productive work," Romano said.

Another cost-saving technique is based on working smarter, rather than harder. A case in point: "When we washed a plane before and some section didn't come up to standard, we had the crew do the whole job again," said Romano. "To avoid this, we took a hard look at which areas were being missed, and redesigned our workflow to make sure they were being done right the first time." As for attracting outside work? Besides making its prices competitive with third-party MROs, "we re-energized our marketing department, which was basically dead," Romano said. "As a result, we took part in the recent MRO convention to make our presence known. Today, we have lots of foreign tails in our shop. For instance, Synergy Aerospace has hired the Tulsa Base to do light and heavy C-checks, plus modifications including seat reconfigurations and installation of enhanced ground proximity warning systems. "We competed against some of the best and won this contract," said Bob Reding; AA's senior vice president of technical operations.

The TWU/AA team has generated $45 million in savings and new revenues to date and is keeping a close eye on progress as they work towards their "extreme" goal. With such cooperation anything is possible, even a $500 million target.-- by James Careless

Airbus Expects A350 Mx Cost Reductions of 15 Percent

Reduced airframe maintenance costs of up to 15 percent for the A350 compared with the A330 are being forecast by Airbus as the A350 program gets under way, with a service entry date of mid-2010 scheduled for the -800 model. This will be achieved in a number of ways, according to Colin Stuart, Airbus vice-president of marketing, with design philosophy for the new, mid-range Airbus model driving down airframe and systems maintenance costs.

Maintenance cost reductions are expected from two prime sources: the extensive use of composites in the A350, which will be much greater than in earlier Airbuses and in particular in a mostly composite wing, and through a stretch-out in check intervals as a result of the former combined with a range of attendant technological improvements.

Unlike the earlier A330, whose wing was metal-skinned, the A350 wing will have upper and lower skins made entirely of composites. This will provide great strength and high fatigue resistance and, according to Airbus, allow easy damage assessment and, where maintenance is concerned, mean 60 percent fewer fatigue-related maintenance tasks.

The increased use of composites will also mean greater aircraft availability due to increased time between maintenance checks. As examples, the A350 is expected to require an A-check every 800 flight hours compared with the 600 required for the A330. A C-check on the forthcoming A350 will need to be done every 10,000 flight hours or 24 months compared with 18 months for the A330, and a structural check on the A350 should take place every 12 years against the current 10 years for an A330. All of this adds up to a direct maintenance cost reduction on the airframe and systems of 15 percent.

Much new technology is being applied to the 245- to 285-seat A350, including standard incorporation of the AIRMAN on-board maintenance advisory system, the technical E-Logbook, and onboard information terminals. There will be an engine bleed-air system of the kind already in service on the A340-600, a new external lighting system, and a new and simplified fuel system with a reduced number of components.

As a result of technical improvements, engineers were able to design a smaller and lighter tailplane, which has resulted in further weight savings. Other improvements envisaged include intervals for the A-check eventually going to 1,000 flight hours and 12,000 hours for a C-check.