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American's MRO spin-off does not appear imminent

Management at American Airlines parent AMR Corp. has not listed its maintenance, repair and overhaul arm in a group of its businesses currently under strategic review.

Late last year during the much-publicized plan by AMR to spin-off its wholly-owned regional subsidiary American Eagle Airlines, AMR executives hinted that its MRO business could join Eagle and its AAdvantage loyalty program in being divested.

At that time company CFO Thomas Horton noted the US marketplace does not “really have a big MRO provider as exists in Europe today and other parts of the world”.

But in its annual report recently filed with US regulators that adheres to Sarbanes-Oxley financial and disclosure information, AMR noted that only American Eagle, AAdvantage and its investment advisory subsidiary American Beacon Advisors were under review. Sarbanes-Oxley was enacted in 2002 to improve accuracy and reliability of corporate disclosures of publicly traded companies.

In addition to handling American’s maintenance, the company’s maintenance and engineering arm also has third-party contracts with carriers that include American Eagle, Air Canada and Allegiant Air.

Two MD-80 heavy C check lines at the company’s Tulsa maintenance facility are dedicated to handling maintenance of Allegiant’s all MD-80 fleet. The carrier expects to fly up to 40 aircraft by year end.

 © AirTeamImages
Allegiant Air MD-80


“While we may not be able to compete with other MROs on the wage rate, we can compete by lower material costs – due to the experience of our mechanics and our engineering capabilities allowing us to repair expensive parts instead of having to replace them,” American says. It also points out delivery of aircraft back to the vendor on dates promised or earlier.

A significant project AMR’s maintenance and engineering department is undertaking this year is a midlife avionics upgrade for American’s Boeing 757s/767s designed to allow the carrier to operate in any next-generation air traffic control system across the globe.

Source:'s sister premium news site Air Transport Intelligence news

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