Division Representatives Attend MRO Conference
This week Representatives Chris Moore and Bob Fisher attended the MRO Network conference in Montreal Canada. A detailed report will issued shortly but there were a few key takeaways. Trending continues to be positive for domestic maintenance as labor rates in Asia continue to move upward. It is expected that both established Asian countries labor rates, as well as emerging Asian countries labor rates, will converge with domestic rates in approximately 2018.
That trend will make it impractical to offshore widebody overhauls to Asia in the future. A second key point is that M&A (merger and acquisition) activity is heating up with more than 100 such transactions expected by the end of this year. That's up slightly from last year's roughly 80 transactions. For the past five years this trend has continued as MRO's which have little yield seek to join forces to produce more volume. Obviously this will drive up costs to airlines as this trend continues. Look for more companies start to discuss outsourcing using the word contracting.
According to ARSA the word contracting doesn't have the same negative connotations as outsourcing with the public and regulators. Certainly it makes no difference what it's called, as the old saying goes you can polish a turd but it's still a turd. Look for the detailed report of this conference in the next TAMC newsletter.
Scope Meeting Held
On Wednesday the scope committee met in Houston. The line and hangar plans for sCO and sUA were discussed. There will be some movement of work around the system as fleets are moved but there was no anticipation of any headcount reduction systemwide. There will be movement of some line check work into IAD and EWR as a result of the new hangars in those locations. There was also discussion of bringing back in house some checks that have been previously outsourced. The company explored this possibility with the committee and it appears there could be movement to bring some of this work back into the SFO base.
Grievance to be Filed Regarding Health and Welfare Benefits
As reported in the update last week the Division will be filing a grievance this coming week over the unilateral change in medical benefits. The company was notified that the union will be processing one grievance on behalf of the membership. The Division intends to move this grievance to the front of the arbitration docket to attempt an expedited resolution.
