Dub

"BEIJING, Aug. 30 /PRNewswire-FirstCall/ -- United Airlines (BULLETIN BOARD: UALAQ) and Aircraft Maintenance and Engineering Corporation (Ameco Beijing) signed a five-year agreement to conduct airframe heavy maintenance for United Airlines' Boeing 777 fleet.

Over the next five years, United Airlines' Boeing 777 fleet will go to Ameco Beijing for heavy maintenance visits (HMV). More than 50 HMV's are planned for the first three years, and as many as 80 will be completed over the contractual period. Based on this plan, Ameco Beijing will begin heavy maintenance work on the first five aircraft nose to tail starting this October. ...... "

Full details at http://www.industrywatch.com/pages/i...Manufacturing&

qasr

It is saves UA money and does not compromise safety, I think it is a good move. The wording of the article seems to indicate that the 777's are going in for D-checks... are they that old already?

I can't imagine the Mechanics union is going to be too happy about this though...

Wireless

Interesting. Ameco is a joint venture between Air China (60%) and Lufthansa German Airlines (40%).

I wonder if that means Air China might eventually join Star Alliance (I don't remember the current rumors).

While it sucks to see more offshoring, obviously United Services or any other US based provider couldn't be as competitive.

German Expat

Air China and Lufthansa already have code shares between China and Germany. There are plenty of rumors out about Air China joining Star Alliance and I assume this will eventually happen. At the moment the mainland Chinese carriers still try to figure out which alliance gives them the best deal. China Eastern has some agreements with Cathay. Eventually they will join but hope to get the best deal.

WindFlyer

That would be correct, as communicated to me by someone within UA.

It makes sense to me. D-checks, after all, are very heavy on labor (vs. say, engine overhaul).

This follows the previous announcement of 747 D-checks going to Korea.

UNITED959

Actually, we just missed the 10 year anniversary...June 7, 1995 was the first 777 passenger flight, UA921 LHR-IAD.

Hard to believe it's been 10 years already!

Seems like yesterday UA had the "Ahhh...that new plane smell" billboards around ORD.

dawei

I'm a huge fan of China but this one scares me.

MKE-MR

I'm just surprised that heavily-touted United Services, which does heavy maintenance for a number of other airlines, is the loser on this deal. It sort of dimishes their credibility (to those, like me, who don't have any idea about the backstory or any good reasons for this other than outsourcing=money saved).

SEA_Tigger

I imagine it depends on each situation. When UA was the first and largest operators of 777s, they probably knew more about it then anyone else, so it seemed logical some domestic and international 777 operators would pick UA for maintenance of their birds.

Now most airlines have years of experience with the 777, meaning that the level of expertise is more widespread, and being able to get an experienced crew in China for half (or less) then an equally experienced crew in the US is now more important. So as UA's maintenance business shrinks (or specializes in other areas - they do a lot of USAF work on transports), UA can move their own maintenance offshore and get the same quality of service at a much lower price.

Dub

Even if true, this is sad.

The worry, of course, is that it is not the same quality, just cheaper.

WindFlyer

United Services strength is in engine overhaul (which is also very parts-intensive). The service going offshore is airframe heavy maintenance, which is very labor intensive.

UA_Flyer

Anyone know of any other major international carriers have outsourced their heavy maintenance to China? IIRC, NW is doing it, but I can't confirm.

I am not worry about quality of work, but are concerned with the loss of jobs.


Cathay has bought 10% equity in Air China, and the two airlines are working on codeshare flights, joint marketing, linking frequent flyer programs, maintenance and standardize reservation and IT systems. China Eastern (Cathay's out-of-favor playmate) has expressed its anger over Cathay's investment in Air China, and has indicated its desire to link with an international alliance. Air China has said the tie up with Cathay may not affect its choice of international alliance, although Cathy has expressed its desire to bringing Air China into Oneworld...........stay tuned!

SEA_Tigger

Honestly, quality should not be an issue. The planes need to be repaired/refurbished to FAA specs, whether the person doing it is a PhD being paid $50,000 or a correspondance course student being paid $500.

Trained labor is in high demand in China right now as more and more of the workforce is both highly skilled and highly trained. So it is quite likely that the folks doing the work in China are everybit as skilled and capable as the folks in the US.

UNITED959

Very true. The other important factor is the overall engineering of the 777 is more than capable.

I would think that if China got its hands on the 777's blueprints and started to produce imitations at 1/2 the price, then we'd need to worry. But even in that scenario, I'd be willing to bet cost-conscious airlines wouldn't give them the time of day.

tanda_raho

From what I understand, only the XP configured 777s fly across the pacific. so the XC, XI and domestic version 777s will still get serviced elsewhere or they would fly them to china just for the servicing? I think jetblue flies their ACs empty to venezuela for servicing (not sure if that is for engine overhauls or more major work). There was a WSJ article about that a few months back.

In that same article, they were also talking about bringing replacement part design and manufacturing back in-house due to the high costs of replacement parts from third party vendors (one example was toilet seat). I wouldnt be surprised if this design and manufacturing was also shifted to china if UA decided to bring it inhouse.

Also, does anyone know the frequency of these HMV per aircraft. Does 80 visits over the next 5 years add up with the number of 777s currently in the fleet and the frequency with which these services need to be done?

Also, India is not far behind. A new airport is going up in HYD and a contract was signed to open up a pretty big maintenance center there for a AC servicing vendor like Ameco. This being the first new airport being built in India in a while, the same plans were also discussed for BLR. And with US and european airlines offering increased service to India and the Indian govt I think is now allowing US carriers onward flying permissions, it seems feasible that the all the long haul jets could be cycled through India and China.