American Airlines Overhaul Base Goal: $150 Million

American Airlines hopes the combination of additional outside maintenance work and more cost cuts will make the Kansas City overhaul base a profit center for the world?s biggest airline.

The Transport Workers Union, which represents about 800 employees at the base, hopes the initiative will lead to more jobs at the facility.

American and union officials gathered at a hangar of the overhaul base Thursday afternoon to announce that the company has set a goal of generating $150 million in revenue and cost savings at the facility by the end of 2007.

About 100 employees attended the news conference. Ed Chevrestt, managing director of the Kansas City facility, said the $150 million goal was agreed upon after a series of meetings with hourly and salaried workers at the base.

American hopes to increase revenue through additional third-party maintenance while cutting costs through improved efficiencies and cost reductions at the base, Chevrestt said.

For more than a year, American, the union and Kansas City have been exploring ways to market the overhaul base to secure more third-party work for American as a way to stabilize the local work force.

About 935 hourly and salaried employees work at the base at Kansas City International Airport. About 900 American employees have been laid off since December 2004 because of turmoil in the airline industry and the airline?s continued slump.

American and union officials are hoping Thursday?s announcement is the beginning of better things to come at the Kansas City base, whose workload and staff have dropped sharply since American?s parent, AMR Corp., acquired Trans World Airlines out of bankruptcy in April 2001.

Gordon Clark, president of TWU Local 530, said if more third-party contracts are obtained later this year, a small recall could be possible.

?This is a steppingstone in the right direction,? he said. ?If we continue with the work we have now and some other things go right for us, I could see our work force possibly expanding, at least a little bit.?

In addition to its fleet of Boeing 757s and 767s, the base is working on six Air Canada planes. Maintenance has been done for a carrier called Capital Cargo as well as engine work for Pratt & Whitney.

In March, the Kansas City base will begin maintenance work on 25 aircraft in American Eagle?s fleet. The base had to compete for the contract on cost, just like other maintenance facilities, Chevrestt said. American Eagle is the regional carrier operated by AMR.

Chevrestt said employees are receiving training to work on the planes, which are different from the aircraft normally overhauled at the base.

?We?re very excited about helping our sister carrier this way,? he said. ?I?ve never heard of our maintenance operations having a contract of this scale with American Eagle before.?

The program announced Thursday is similar to what started last year at American?s biggest maintenance facility, in Tulsa. There, the airline?s goal is to generate $500 million in annual outside revenue and cost savings. The Tulsa base has about 8,000 employees. American also has a maintenance base at its corporate headquarters in Fort Worth, Texas.

Last year in Kansas City, American signed a 25-year lease to continue operating part of the massive, city-owned maintenance base in exchange for incentives. The incentives remain in place as long as American keeps at least 700 employees at the base.

Kansas City Star


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