AA Celebrates Achievements: The Tulsa Maintenance Base Accomplishes $501 Million in Third-Party Work and Reduced Costs.

By D.R. Stewart, Tulsa World, Okla.

Feb. 2–American Airlines’ 7,000 Tulsa employees took half a day Thursday to congratulate themselves on noteworthy financial and operational performances in 2006 before raising the bar higher for this year.

American and its unionized mechanics said they have set a goal of winning $175 million in third-party aircraft maintenance work this year after achieving $501 million in third-party work and reduced costs in 2006.

In ceremonies at the Tulsa Maintenance & Engineering Center, 3800 N. Mingo Road, American executives, union representatives, and city, county and state political leaders praised the company’s labor-management partnership that has cut maintenance costs and increased productivity.

In 2005, American and its Transport Workers Union agreed to work together to achieve $500 million in cost savings and third-party maintenance work at its Tulsa base, which is the world’s largest aircraft maintenance facility and employs more than 6,000 mechanics.

“The successful accomplishment of the very aggressive breakthrough goal of $500 million in value creation in less than two years is proof that the concepts of working together and continuous improvement this company set in motion three years ago can achieve positive results for our employees, shareholders and customers,” said Bob Reding, American’s senior vice president of technical operations.

American Chairman and CEO Gerard Arpey, who has been with the company for 25 years, said the efforts of the Tulsa work force have never been more important or more impressive than during the past three years. In 2003, American narrowly averted filing bankruptcy by accepting $1.6 billion a year in wage and benefit concessions from its unionized mechanics, pilots and flight attendants.

“It is no secret to anyone here today that our industry has been in tremendous turmoil,” Arpey said. “American, like every airline, has been challenged in the past few years like never before. Many of our competitors have turned to the bankruptcy courts to solve their problems, and in so doing turned their back on the commitments they made to their people, their creditors, their suppliers and their communities.

“At American, we have chosen a different path. While others pulled apart and lost control of their destiny, we worked together and retained control of ours. We embraced the fact that the future of our airline is in our hands, and we want to keep it that way. We have faced enormous challenges honestly and tackled them directly — and that’s what we’re going to keep doing.”

David Boren, a member of the board of directors at AMR Corp., American’s parent, and president of the University of Oklahoma, said American and its Tulsa employees have forged a new path in the airline industry with hard work and creative thinking.

“At last count, 48 percent of major maintenance work at the commercial airlines and cargo carriers has been moved outside the United States,” Boren said. “We have a message to send to people across the country: If you want to fly on a U.S. airline that is maintained by Americans, fly American Airlines every chance you get.

“It’s not just important for American Airlines, Oklahoma and Tulsa. What is happening today is important for America. We have 6 percent of the world’s population, and we have never been challenged like we are today . . . by a world that is harder to understand and . . . more dangerous.”

Carmine Romano, American’s vice president of Tulsa Base Maintenance, said the cooperation initiative has increased productivity, lowered costs and produced AMR’s first annual profit since 2000.

In 2006, AMR posted earnings of $231 million. The company lost $857 million in 2005.

Romano said the city of Tulsa contributed to the turnaround with Vision 2025, which provided $22.3 million in sales tax revenue for equipment purchases, new information technology systems and an upgrade to its wastewater treatment plant.

“By making an investment in American Airlines, Tulsa made a huge investment in itself,” Romano said. “The Vision 2025 funds have allowed us to keep work in-house and help make us competitive enough to secure lucrative customer work. The progress we have made in Tulsa would not have been possible without the Vision 2025 funds.”

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Copyright (c) 2007, Tulsa World, Okla.

Distributed by McClatchy-Tribune Business News.

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