American Taps In-House MRO for Outside Earnings

$500 million: that's how much American Airlines hopes to earn from its Tulsa Maintenance & Engineering Base (TM&EB), which is currently a cost center for this carrier. So how can the 7,000 strong TM&EB workforce---employed at "the largest aircraft maintenance facility in the world," according to American--hope to make such a radical change in less than two years? The answer is American's "working together" corporate philosophy, where the company and its unions work together as true business partners, with nothing held back.

As utopian as "working together" may sound, the truth is that it's delivering results for American. The most obvious achievement is the agreement between TM&EB's management and Transport Workers Union Local 514 to turn Tulsa into a money-maker. To do this, the airline and its employees will collaborate in reducing costs, attract more third-party MRO clients, and bring any American MRO work that has been outsourced back in-house.

"We know we are bucking the trend of the aviation industry by keeping most of our maintenance work in-house, but we have agreed to take a different approach to address our challenges," said Carmine Romano, American's vice president responsible for Tulsa base maintenance. "The goals we have set forth can be achieved only by working together and empowering our employees. It will require a commitment by everyone, not just one or two people, but everybody."

"We are not letting others decide what our future should be," added Dennis Burchette, president of TWU Local 514. "Together we are going to do everything within our ability to control our destiny and success. Tulsa was one of the first sites where this practice began."

Should American succeed in transforming the TM&EB into a revenue generator, expect other airlines to follow suit, and some to consider adopting American's "working together" philosophy, too. Even the smallest forms of cooperation can make a difference: for instance, American's mechanics designed a tool to resharpen drill bits that used to be thrown out, saving the airline more than $300,000 a year. -- By James Careless

Continental Probed on Concorde Crash

A French judge on March 10 placed Continental Airlines under judicial investigation over its role in the Concorde crash near Paris in 2000. Under French law, this is normally a first step towards eventual criminal charges, which would be "unintentional manslaughter and injuries." The airline has denied responsibility.

The move follows a report issued last December by a panel of legal experts. The report highlighted the fact that a metal (titanium) strip, detached from a Continental DC-10 and lying on the runway, triggered the fatal chain of events. The Air France Concorde had a tire cut by the strip. The tire subsequently exploded. The fuel tank was damaged, and leaking fuel caught fire.

There is a debate on whether the wear strip that fell from the DC-10's number 3 engine was made of the right material. The report said that replacing the original part with a titanium one was not approved by the FAA. Continental claimed that regulations allow the use of the titanium strip and added that this metal is more wear-resistant than the original part.

The legal experts' report also emphasized, however, a "major design inadequacy," detected as early as 1979 on the Concorde. Separately, the administrative report, conducted by the Bureau d'Enqu�tes et d'Analyses (BEA), the French equivalent of the NTSB, mainly insisted on the Concorde's relative fragility to tire burst, a common incident.

The two reports have different objectives. The BEA's report aims at avoiding any other accident of the same kind. The French justice is trying to determine responsibilities.

The July 25, 2000 accident took place in Gonesse, near Paris Charles-de-Gaulle airport. Concorde F-BTSC crashed there shortly after takeoff, killing 113 people, all 109 on board and four on the ground. -- By Thierry Dubois

Cash-strapped SMA gets support from Snecma

French piston engine manufacturer SMA (Soci�t� de Motorisations A�ronautiques) last January filed for bankruptcy protection and spent one month in this situation. Based in Lognes, in the Paris outskirts, the firm initially had to spend six months under judiciary watch, according to French law. Little is known about the financial support its shareholders (Snecma, Renault, and EADS) provided to put SMA back on track quicker. It is understood that Snecma has taken over at least some of its partners' shares.

SMA produces the diesel-cycle 230-horsepower SR305 engine, which uses Jet A instead of avgas. It is said to be less costly to operate than its conventional competitors. The company had recently to cope simultaneously with unexpected expenses and delayed revenues. This is what led to the present predicament, according to statements by SMA executives.

First, some airframers asked for additional development. Second, the FAA has considered the SR305's electronic control system as "critical." In their certification, European aviation authorities had previously said it "essential," as a mechanical backup system is available. For U.S. certification, SMA therefore must do further, expensive tests. They notably involve the electronic system's protection against lightning.

All this caused a delay in the delivery of several dozen engines. The planned revenues have been delayed at the same time. Hence some serious funding problems.

SMA shareholders remain tight-lipped about the future of their joint-venture. Asked for its position while SMA was still under bankruptcy protection, aero engine and equipment manufacturer Snecma did answer. A spokeswoman said, "discussions are underway between the shareholders and the company bankruptcy administrator to consider a possible continuation of SMA's activity." According to French aerospace weekly Air & Cosmos, Snecma was ready to take over its partners' shares. However, after SMA was declared back on track and thus out of bankruptcy protection, the head of Snecma's external relations department did not return repeated phone calls from Aviation Maintenance.

No job cuts have been announced. There are currently 51 employees in the company. Temporary furloughs have been necessary, however, as the production rate remains low. Four or five engines are assembled each month today. In contrast, SMA's factory in Bourges (in the center of the country) was designed and built to produce some 100 examples a month. In 2004, the first year of production, only 23 engines were delivered in Europe, Latin America, South Africa, and Australia.

Since its official launch in 1997, the program has suffered numerous setbacks. Technical problems during early tests caused the first delays. Then, SMA elected to drop plans for geared versions, which were finally seen as too complex. Insufficient funding from shareholders was cited at some point. Setting up the Bourges facility also was a lengthy process.

For its diesel engine, SMA has long been claiming a fuel burn that is "30 to 40 percent lower" than that of conventional piston engines. Thanks to the lower price of Jet A (compared to Avgas) and lower maintenance costs, SMA has been pledging a lower operating cost. -- By Thierry Dubois

AAR's Indy MRO to Host UAL B737 Heavy Maintenance

AAR has been selected by United Airlines to be the provider of heavy maintenance for United's fleet of Boeing 737s. The five-year agreement taps AAR as the exclusive provider of heavy maintenance for the United 737s, operating up to four lines at the new AAR Aircraft Services-Indianapolis facility located at Indianapolis International Airport. AAR's Indianapolis maintenance base is a former United Airlines facility, so United is actually contracting for maintenance to be done at the same location using many former United mechanics who have hired on with AAR.

"We're very pleased that United selected AAR to provide heavy maintenance services for its 737 fleet. AAR has extensive experience maintaining 737s and is absolutely committed to helping United uphold the highest levels of safety, quality, and service," said J. Mark McDonald, group vice president. "AAR's facility in Indianapolis is one of the most advanced MRO facilities in the world. We're optimistic about its future prospects and look forward to growing the business and serving customers from all ten of our hangars."

"The new deal we have signed with AR to perform heavy maintenance on our B737 fleet has successfully reduced United's cost for this work while maintaining the highest level of quality. We look forward to working with AAR as their customer for the B737 maintenance and as an MRO provider," said Bill Norman, United's vice president of base maintenance. United Services currently provides some engine maintenance to AAR and Norman said they will continue to seek opportunities to provide MRO support to AAR.