Third-Party Audit Shows Carrier Has Exceeded Contractual Limit
Representatives with the Aircraft Mechanics Fraternal
Association state an independent maintenance audit shows that
United Airlines violated a key clause of its labor agreement with
the union -- a limit on outsourced maintenance. The audit found UAL
exceeded the contractual limit by 50 percent, according to the
"This means millions of dollars of excessive outsourced work
that translates into hundreds of lost jobs," said David Frizzell,
an AMFA Airline Representative. "Since 2001 the number of mechanics
and related staff represented by the Union at United fell from
15,000 to 5,600."
The contract limits outsourced work to 20% of United's total
maintenance needs. The audit of the 2005 financial data, conducted
by a Company-approved accounting firm, found that UAL outsourced
half-again as much of its total maintenance spending -- or over
Lee Seham, AMFA's General Counsel, states "aviation is a
safety-sensitive industry and excessive outsourcing should be a
concern of the flying public."
Calvin Scovel, the Department of Transportation Inspector
General, told a House aviation subcommittee on March 29 that the
FAA cannot adequately oversee the quality of the growing volume of
maintenance that airlines outsource to contractors.
The audit acknowledged that UAL reported an outsource rate as
16% of its total spending. The reason these two rates vary is that
United counted labor and materials in the "Total Maintenance
Spending" number (the denominator) but counted only labor in the
"Outsource Maintenance Spending" number (the numerator). This
inconsistent methodology is the root cause of the disagreement. The
Union says the contract requires all expenses (labor, materials,
etc.) be included on both levels of the calculation.
AMFA hired -- with UAL agreement -- a mutually acceptable
independent auditor to conduct the audit. The audit is based on
procedures agreed to by AMFA and UAL. The agreed upon procedures
engagement was conducted in accordance with attestation standards
established by the American Institute of Certified Public
Accountants. The independent auditor reported the results of
procedures performed and issued no opinions.
"AMFA urges UAL to work with the Union toward a resolution,"
said Jim Seitz, AMFA’s Airline Contract Administration
Coordinator for United Airlines. "The Company must immediately
cease any additional outsourcing and begin to arrange the return of
maintenance to AMFA members. The Union will work with the Company
to identify the outsourced maintenance to return. AMFA seeks to
resolve this issue as soon as possible with UAL and offers to meet
with the Company at any place and any time."