American Airlines will take wrenches to 29 planes owned by Latin America's Synergy Aerospace in a maintenance deal announced Wednesday.
The agreement in principle is in the "tens of millions of dollars" range, said Gerard Arpey, the company's CEO, in remarks after the company's annual shareholders' meeting.
It marks a victory for American, as it seeks to turn its maintenance centers into profit centers by doing work for other airlines and airplane owners. The strategy is different from that of some competitors who are outsourcing heavy maintenance in order to cut costs.
"This contract validates our maintenance philosophy that we can efficiently and reliably complete our own maintenance work in-house and become competitive for third-party work by diligently adopting the principles of continuous improvement and working collaboratively with our unions," said Bob Reding, senior vice president at American.
Under the agreement, American will do heavy maintenance checks and modifications of 29 Fokker F100 aircraft owned by Synergy, whose parent controls Colombia-based Avianca, Ocean Air of Brazil and Peru-based Wayra.
AMR shares were up 50 cents, or 4.5%, at $11.52.