Will outsourcing help save ailing American Airlines?

With its latest bankruptcy announcement, American Airlines ended its holdout as the last big airline to maintain its own planes. No one seriously disputes the airline’s attempt to cut costs but some critics question whether outsourcing will end up as a savior.

The airline announced that it will cut all the carrier’s jobs at its airports with the fewest daily flights: in Ontario, six other US cities and two cities in Canada will be outsourced.

American previously announced plans to eliminate 13,000 union jobs, or roughly 15 percent of its workforce, as part of an overall drive to save roughly $1.25 billion in annual labor costs. The latest move is separate.

American, the third-biggest US carrier, will begin presenting testimony to persuade a bankruptcy judge to let it void existing union contracts and impose new ones to secure the spending cuts, said Bloomberg News.

"Not a single decision that affects a single employee was made lightly," the company said in a letter signed by Craig Kreeger, senior vice president for customer experience, and other executives.

American says its restructuring is being done by ARP, which stands for Agent, Representative and Planner, which "takes into account many factors which include: staffing based on American’s network and airports; productivity and workflow; customer service needs and how pay and benefits for this group compare to other airlines."

Its new plan will reduce annual employee costs by 20% or $95 million, the group says.

Other major rivals also cut thousands of jobs when they restructured in bankruptcy several years ago, emerging as leaner and tougher competitors, Bloomberg News said.

Opposition from the airline’s labor force is expected but there are other critics of outsourcing airlines.

American maintenance workers in the past have said their training and experience give them a safer mentality and approach to their work.

There are dozens of firms across the country that specialize in the maintenance airlines no longer care to do — in North Carolina, California, Arizona, Florida and Texas.

While some of these firms are located within the United States, many of their workers are brought in from overseas to save money, News 8 in Dallas has reported.

News 8 in an investigation at San Antonio Aerospace found some workers could not speak English, requiring translators to help them fill out the airport security forms needed for admittance to the San Antonio airport facilities.

News 8 found these foreign workers are typically paid a fraction of what mechanics for airlines are paid, even though the repair facilities are in the US. They are often defined as "subcontractors" and paid no benefits.

In some cases, the maintenance facility houses them at its own expense, the TV station said.

American Airlines itself has been operating out of bankruptcy court since November.

Meanwhile, US Airways is reportedly in talks with creditors for American Airlines about a possible merger — a deal that would reduce the number of major big national airlines to just three.

According to published reports and industry analysts, US Airways has put forward plans to take over American. AMR has asked to extend its filing deadline for its reorganization plan until Sept. 28.

By David Wilkening