UAL to Outsource Maintenance on 777's to Chinese Company

From today's Chicago Tribune:

China to service United 777 fleet
Ameco Beijing gets $30 million deal for heavy maintenance

By Mark Skertic
Tribune staff reporter
Published August 31, 2005

United Airlines said Tuesday that it will shift heavy maintenance of its Boeing 777 aircraft to a Chinese company, part of an effort by the airline to lower its labor costs.

Over the next five years, Ameco Beijing will service all of the 777s in United's fleet. The first work is scheduled to begin in October.

He Li, chief executive of Ameco Beijing, told Bloomberg News that the deal is worth more than $30 million. United declined to say how much money it expected to save.

The planes are among the largest United flies, aircraft typically used for transcontinental and international travel. United had been outsourcing maintenance work on its 777s to Timco Aviation Services Inc. in North Carolina.

Outsourcing some work makes good economic sense, Chief Executive Glenn Tilton told workers in a voice message Tuesday.

"We are focusing on the things that we do best, which means growing our business in engines, landing gear, high-tech components, avionics and line maintenance," Tilton said.

"We also recognize that there is work where we at United do not have an advantage. That work is performed for us by vendors in the U.S., Korea and other countries, now including China."

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Wonder what this portends for union workers?
RAS