Skip to: Content
Skip to: Site Navigation
Skip to: Search

THURSDAY, NOVEMBER 26, 2009
| Subscribe to Newser's RSS feeds RSS | Follow Newser on Twitter Twitter

American Airlines will close Kansas City, Mo., maintenance base and others, cut 700 jobs

American Airlines will close Kansas City base

American Airlines will close a maintenance base in Kansas City, Mo., and shrink other repair shops next September as the slump in travel leaves fewer planes to maintain.

The moves will eliminate up to 700 jobs nationwide, about 5 percent of American's maintenance work force, the company said Wednesday.

Maintenance senior vice president Carmine J. Romano said in a letter to employees that the closures were "a difficult but important step" to reduce maintenance operations as American cuts back on flights due to the yearlong slump in travel.

American also has major maintenance bases in Tulsa, Okla., and Fort Worth, Texas. It has considered closing one of the bases for several years, but held off after picking up work on other airlines' planes in Tulsa.

The airline said Wednesday that by next September it will also close smaller maintenance stations at airports in Kansas City, Detroit, Minneapolis and San Jose, Calif., and shrink stations in St. Louis _ where it is sharply cutting flights _ and San Francisco.

American's fleet has dwindled from more than 900 planes to about 600 over the past decade as it has been rocked by the 2001 terror attacks, two recessions, more competition from low-fare carriers, and a sharp decline in business travel.

American parent AMR Corp., based in Fort Worth, has lost $1.1 billion so far this year after losing $2.1 billion last year. Revenue is down 19 percent this year.

American officials said they tried to keep the Kansas City base open by finding work repairing planes for other airlines. Spokesman Tim Wagner said the company had made about a dozen bids in the past 10 months, but "we just didn't win any of them because our labor costs are too high compared to offshore" shops.

The airline signed a 25-year lease on the building in 2005 that called for annual rent of $1 million, with the payments rising if employment fell below 700 workers. The city was to issue at least $40 million in bonds for renovations, with another $37 million in bonds available if American needed future upgrades.

Mayor Mark Funkhouser said he didn't blame American for leaving _ "We understand in this recession these sorts of things will happen" _ but the city expects American to honor lease payments of more than $1 million a year through 2029. He said American wasn't violating terms of the incentives by leaving.

The huge, saddle-shaped building has been an economic fixture in Kansas City since the 1950s and was operated by TWA before AMR bought that airline out of bankruptcy in early 2001. At its peak, before TWA began its death spiral, the base employed 10,000 workers, but that is down to about 500 now.

The beneficiary of the Kansas City closure could be Tulsa, where American has about 7,000 workers. The airline recently opened a new maintenance hangar there.

American executives suggested this spring that they might not need three big maintenance bases. Local leaders of the Transport Workers Union, which represents American's mechanics, had acknowledged that because of its smaller size, the Kansas City base could be a candidate for closure.

The Transport Workers Union has had friendlier dealings with American than have pilots and flight attendants, and union leaders were muted in their criticism of American. They blamed the closures on factors from cutthroat competition to airline deregulation.

John M. Conley, an official with the union, said he hoped the airline industry would rebound by September so the workers could find other jobs at American.

The airline offered severance payments of $12,500 for experienced employees in Kansas City and St. Louis who quit before next September.

Frank Lenk, research director for the Mid-America Regional Council in Kansas City, said the loss of the base will have a big effect on the area because it brought high-paying jobs and created sales for suppliers in the region.

Lenk estimated that each job lost at the base will cost two or three other jobs at suppliers and local businesses.

___

AP Writer David Twiddy in Kansas City contributed to this report.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.