Northwest Airlines is gutting two hangars at Minneapolis-St. Paul International Airport because the standard work of overhauling the airline's 747 fleet has moved to Asia.
Air China, meanwhile, is sending its planes to San Francisco for high-tech engine work by United Airlines mechanics.
U.S. carriers have outsourced thousands of maintenance jobs. At the same time, however, some airlines have stepped up their efforts to bring maintenance work into their shops. The major carriers are "insourcing" work from domestic low-cost carriers that don't have their own maintenance crews and from airlines based in China, South Korea, Canada and elsewhere.
The aircraft maintenance industry is "a classic manifestation of globalization," said Martin N. Baily, senior fellow at the Institute for International Economics. "Labor-intensive, somewhat less technically sophisticated stuff goes overseas, but more high-tech, leading-edge stuff would remain in the U.S. Maybe the U.S. even has a comparative advantage."
Delta Air Lines' insourcing includes repair work on engines for Atlantic Southeast Airlines and Comair at Delta's hub in Atlanta. Its revenue from such work has increased, to $200 million last year from $40 million in 1999.
American Airlines recently signed a contract that gives it the option to repair Rolls-Royce aircraft engines for other airlines. United does maintenance work for Air China, Korean Air, Air Canada and the U.S. military.
"We make a high profit margin on engine overhauls and landing gear," said Joseph Prisco, president of Local 9 of the Aircraft Mechanics Fraternal Association, the union representing mechanics at United Airlines. "Air China sends a lot of their engine overhaul work to us. The costs are probably more expensive per head, but we do a faster job and better job than they can get done in their own country."
Globally, the business of repairing or overhauling airplanes is expected to grow to more than $50 billion by 2013, from $35 billion today.
The insourcing helps keep some airline employees busy and modestly bolsters the carriers' bottom line. "Through the bankruptcy process, one of the things we are trying to do is become more efficient -- to look at what we can do profitably and what we can't," said Jeff Green, a United Airlines spokesman.
But the global trends haven't blunted the pain felt by the mechanics who have ended up on the losing end of the outsourcing movement.
Since the terrorist attacks on Sept. 11, 2001, the U.S. aviation industry has slumped, forcing carriers to reduce costs and lay off thousands of workers. As part of their belt-tightening, airlines have shut down huge maintenance facilities in cities such as Oakland and Indianapolis and reconfigured hangars at Minneapolis-St. Paul. Employees who managed to keep their jobs were forced to take pay cuts -- in some cases, several times.
Airlines such as Northwest and Continental and the delivery companies FedEx Corp. and United Parcel Service Inc. outsource to Asia so-called heavy checks, which are required when planes reach a certain age. The heavy checks are more labor-intensive because they require an entire strip-down of the aircraft and repair or replacement of major components, such as the fuselage. Lower pay in Asia makes the work more affordable for the airlines.
"They have no intentions of bringing that heavy work back in," said Jim Atkinson, president of AMFA Local 33 at Northwest Airlines in Minneapolis. "It's very disturbing for me that hundreds of millions of dollars are supporting China and Singapore's economy."
More than half of all maintenance work for U.S. airlines is now performed by contractors -- foreign and domestic -- and that figure is projected to grow to 60 percent by 2008, according to aviation analysis firm Back Aviation Solutions.
Just how much of that work is contracted to firms overseas is difficult to quantify because the Federal Aviation Administration does not track such numbers and the companies that conduct the repairs are reluctant, for competitive reasons, to reveal their customers. Unions also could not provide figures of exactly how many jobs have gone overseas.
American, United, US Airways and Delta said they do not sent any maintenance work overseas, except for quick overnight repairs. Those carriers are restricted by new pay-slashing contracts from sending jobs overseas.
"Typically, U.S. carriers will tend to keep their outsourcing in North America for obvious reasons," said Steve Casley, principal of Back Aviation. "You want to reduce the amount of transportation costs to have the work done."
Union officials claim that aircraft that undergo maintenance overseas are exposed to a potential safety and security risk. They argue that the United States has less oversight over foreign workers and that planes could be exposed to sloppy work or sabotage overseas.
For example, airline maintenance workers in other countries do not have to undergo mandatory drug and alcohol testing or criminal background checks as they do in the United States. "There is a double standard for airline maintenance," said Ed Wytkind, president of transportation trades at the AFL-CIO. "You can't create a fortress-like security in the U.S. but lose those standards overseas."
Continental, which has maintenance performed in Hong Kong and Canada, keeps its own employees on site overseas, spokeswoman Julie King said. "We have our own airline quality control and quality assurance representatives that oversee the maintenance, and our quality assurance regularly conducts audits of our suppliers," King said. "It's a very comprehensive procedure."
The FAA said it recently tightened rules to keep better track of third-party maintenance contractors in the United States and overseas, but the United States has difficulty requiring workers in other countries to undergo certain measures such as drug and alcohol tests.
"We can't go against the sovereignty of another country," said the FAA's James J. Ballough, director of the flight standards service.
The FAA action came in response to a Department of Transportation inspector general report last year highlighting serious lapses in oversight of independent maintenance facilities in the United States and abroad. The report charged that the FAA did not have enough inspectors to conduct thorough observations of repair shops and that the agency focused too much on airline-owned stations instead of contract facilities, which are growing rapidly.
The Transportation Security Administration is expected to issue new rules in June to help ensure that overseas facilities are secure.