How will this affect Tulsa?

[LandArchPoke]

From what I've heard from a few friends that work out there in management have said that Lufthansa is interested in buying the maintenance base and so is some investors from the Emirates. Basically it would be turned into a large contracted based maintenance for different airlines. Supposedly American has been looking into spinning it off that way as well and looking at doing maintenance work for other airlines in order to help pay for the costs to run the base. All I know is it will be interesting to see what happens with this, hopefully it doesn't involve mass layoffs.

[Conan71]

From what I've heard from a few friends that work out there in management have said that Lufthansa is interested in buying the maintenance base and so is some investors from the Emirates. Basically it would be turned into a large contracted based maintenance for different airlines. Supposedly American has been looking into spinning it off that way as well and looking at doing maintenance work for other airlines in order to help pay for the costs to run the base. All I know is it will be interesting to see what happens with this, hopefully it doesn't involve mass layoffs.

They've actually been marketing MRO services to other airlines and the military for, I believe, 10 years or so.  There's a friend of mine who was involved in that very activity.  I've not talked to him in awhile so not sure if they still have very many contracts.  But as I recall they were doing component work like wheel and brakes or panels, I believe.

[Hoss]

They've actually been marketing MRO services to other airlines and the military for, I believe, 10 years or so.  There's a friend of mine who was involved in that very activity.  I've not talked to him in awhile so not sure if they still have very many contracts.  But as I recall they were doing component work like wheel and brakes or panels, I believe.

I think the wheel and brake work is done at the old Builder's Square at 244 and Memorial...might be wrong.

[Ed W]

The big dog in this is the pilot's union.  They're the largest in dollar terms.  I don't know how the flight attendants compare to the mechanics and fleet service, but I suspect they're a more expensive group too.  TWU represents the mechanics and fleet service.  I'm a member. 

The bankruptcy hearing will be on Dec 22.  We'll know more then.  But there are several ways this can play out.  AA could retain the maintenance base in Tulsa with AA employees.  We'd expect to take another wage cut and probably lose benefits.  They could outsource all the work, and we'd be out of jobs.  Or another company could buy the facility, like Spirit taking over from Boeing, and we'd all have to re-apply for our jobs.

 

[Red Arrow]

The bankruptcy hearing will be on Dec 22.  We'll know more then.  But there are several ways this can play out.  AA could retain the maintenance base in Tulsa with AA employees.  We'd expect to take another wage cut and probably lose benefits.  They could outsource all the work, and we'd be out of jobs.  Or another company could buy the facility, like Spirit taking over from Boeing, and we'd all have to re-apply for our jobs.

Just curious... Given a choice between reduced wages and benefits with AA or a buyout,  what would most of the workers prefer?  Any possibility that the buyout might result in something better than staying with AA for those re-hired?

[heironymouspasparagus]

Just curious... Given a choice between reduced wages and benefits with AA or a buyout,  what would most of the workers prefer?  Any possibility that the buyout might result in something better than staying with AA for those re-hired?

Second question - no.

Spirit didn't improve things for people.  This won't either.  At least for the worker bees in the place.
Competent management able to run a successful airline would have been the best for all.

[Red Arrow]

Competent management able to run a successful airline would have been the best for all.

I would have to agree with that.  There's probably a little blame to spread all over though.

[Jeff P]

From what I've heard from a few friends that work out there in management have said that Lufthansa is interested in buying the maintenance base and so is some investors from the Emirates. Basically it would be turned into a large contracted based maintenance for different airlines. Supposedly American has been looking into spinning it off that way as well and looking at doing maintenance work for other airlines in order to help pay for the costs to run the base. All I know is it will be interesting to see what happens with this, hopefully it doesn't involve mass layoffs.

If it plays out like this, it could end up being a good thing for the facility and workforce.

Having multiple airline customers with many different types of airplanes could mean expansion, instead of being at the mercy of one financially strapped airline all the time.

[Conan71]

Second question - no.

Spirit didn't improve things for people.  This won't either.  At least for the worker bees in the place.
Competent management able to run a successful airline would have been the best for all.

Do you or did you actually work for Spirit, Rockwell, Douglas, or Boeing?

[heironymouspasparagus]

Do you or did you actually work for Spirit, Rockwell, Douglas, or Boeing?

Rockwell.  Friends and neighbors at AA, Boeing, Rockwell, Douglas (manufacturing).  Only one left at Spirit and he seems to like it pretty well.  Hasn't left, anyway.

[Vision 2025]

I think the wheel and brake work is done at the old Builder's Square at 244 and Memorial...might be wrong.

Correct location, excellent facility.

[nathanm]

I would have to agree with that.  There's probably a little blame to spread all over though.

IIRC, the unions have agreed to many cuts over the past few years. TBH, what would have helped more than competent airline management would have been AA's competitors not going BK and instead raising fares enough to cover costs. Because the airlines collectively refuse to charge enough to pay for running an airline, they keep going through this cycle of BK after BK. Southwest, JetBlue, and other discounters manage a profit only because they're still young enough to not have a lot of the expenses the other airlines have.

[heironymouspasparagus]

IIRC, the unions have agreed to many cuts over the past few years. TBH, what would have helped more than competent airline management would have been AA's competitors not going BK and instead raising fares enough to cover costs. Because the airlines collectively refuse to charge enough to pay for running an airline, they keep going through this cycle of BK after BK. Southwest, JetBlue, and other discounters manage a profit only because they're still young enough to not have a lot of the expenses the other airlines have.

Southwest is 40.  That's plenty old to have the bad-management-ripple-through if it was gonna happen.

Look how many major transitions Continental made in that same time - eliminating all its so-called "past baggage" 3 times along the way (during the 2 bankruptcies and the merger).

[DTowner]

Because the airlines collectively refuse to charge enough to pay for running an airline, they keep going through this cycle of BK after BK. Southwest, JetBlue, and other discounters manage a profit only because they're still young enough to not have a lot of the expenses the other airlines have.

It's not like the airlines do not want and have not tried to raise prices.  Unfortunately for them, ticket price elasticity prevents the attempted increases from sticking.  Selling seats below cost is better than flying with empty seats.  Long term, airlines have to get their cost structures in line with their revenues.  Many of AA's competitors lowered costs (often through bankruptcy) and that put AA at a disadvantage.

[nathanm]

It's not like the airlines do not want and have not tried to raise prices.  Unfortunately for them, ticket price elasticity prevents the attempted increases from sticking.  Selling seats below cost is better than flying with empty seats.  Long term, airlines have to get their cost structures in line with their revenues.  Many of AA's competitors lowered costs (often through bankruptcy) and that put AA at a disadvantage.

Yes, selling a seat at below cost is better than not selling it because the marginal cost of carrying a passenger is so low. However, at some point, they have to take a hard line and change expectations as to the price of a seat. When they sell at too low a price, they condition passengers to expect unsustainably low prices. Until the airlines figure this out, they'll continue to barely hang on. They're mostly just backdooring the necessary fare increases through baggage fees and the like. This lack of transparency is harmful to the market as a whole.