POSTED ON DECEMBER 7, 2011:
American Airlines Crash
Are Tulsans going to become victims or adventurers?
Why does so much of American industry adjust to a downturn or longer term turbulence by a knee jerk toss of workers?
This past week, American Airlines (AA) decided to do what all its big-time U.S. airline competitors did some years ago -- it filed for bankrupt "protection": a gambit that allows it to rework its financial obligations and to use more permissive routes to reduce its labor outlays.
American surprised many by taking the action just now.
Unfortunately for Tulsa, the AA filing could mean accelerated outsourcing of its massive maintenance operation, something that could have a monstrous impact on the over 7,000 Tulsa workers, dozens of heavily dependent contractors, a passel of vendor operations and maybe some retired AA folks as well.
But Tulsa has a special dog in this looming and painful transition: Over $30 million in taxpayer funds have been invested in AA and its workers locally in the last five years. And while this amount is chump change compared to the billions American and other commercial players have invested in their operations, it makes T-Town an actual stakeholder, unlike other communities that will also be whacked.
It has to be said that American Airlines has been doing a brave and arguably effective thing that brightly distinguishes it from its competitors: Until recently they have not used off shoring for their vast maintenance efforts. This has benefited Tulsa workers and our Green Country's economy, hugely.
What American Airlines does in the next year or so will have a convulsive and arguably avoidable impact on Green Country workers and our metro economy.
But how about being anticipatory, using the "AA crisis" to launch a round of extraordinary local public and private partnerships and "accelerator" projects in the aviation arena? What about crafting efforts that might forestall more aviation worker layoffs and dramatically sharpen Tulsa's competitive position in the aviation space going forward?
Commercial Aviation Space
Darryl Jenkins, a renowned aviation analyst, believes that fuel costs, labor outlays, debt loads, capacity issues and environmental drivers are reshaping commercial aviation. He says that the future of American Airlines and all the big American commercial players will be determined by how the industry confronts these challenges.
But aviations trajectory will also be shaped by how "big aviation" is pushed by novel stakeholders. Tulsa is in the category of a special stakeholder given our active efforts to publicly support the industry. If we wish to have more of a say in aviation, more of a voice in how thousands of very hard-working, talented aerospace workers hang, we need to step up and be active, imaginative players.
We've done something like this on a big-time scale before -- in late 2003, on a contingent basis for behemoth Boeing, $350 million was approved by Tulsa voters and never triggered. The notion was to get Boeing to locate the assembly plant for the Boeing 787, the breakout "Dreamliner" airliner, a hyper fuel-efficient aircraft, in Tulsa. In December 2003, Boeing chose Everett, Wash., and the Tulsa tax package required to fund the Boeing project was never put in place.
One of the big drivers of aviation is the price of jet fuel and American Airlines has known about the fuel challenge for a hell of a long time. Strangely, AA only acted recently. They announced earlier this year that they will be replacing 460 planes in their very old 600-item fleet with much more fuel efficient aircraft from Boeing and Airbus.
What was the long wait about? Obviously part of the way forward is to have all aviation players (carriers and plane manufactures) look at advanced biofuels, electrical propulsion and other novel systems that can transform the cost structure of the industry and break the oil price/flight constraint.
Some Radical Alternatives
We can best protect Tulsa's investment in aviation and our fab-aerospace work force by thinking beyond AA and doing some imaginative stuff on our own. There are other aviation actors and lots of factors in play that might provide superior opportunities for an agile community with a passion for the fly world.
How about a locally based Manhattan-style project to help "pilot" ultra fuel-efficient propulsion systems for commercial aircraft? At the moment, over 24 percent of the operating cost for commercial airliners is consumed by fuel.
Interestingly enough, in 2003 Tulsa voters approved a $30 million allocation, via the Vision 2025 program, to set up the Helmerich Advanced Research Center at OSU-Tulsa, which targets advanced materials, bio-systems, new energy technologies and novel control systems. The strategy at play: Helmerich will almost surely foster new ventures and promising start-ups that could net new jobs and fresh growth. The Helmerich Project is a sentinel -- one that we should replicate and extend to aviation.
We can see the future. Unmanned drones are at the core of our counterterrorism efforts in Afghanistan and Pakistan, and fascinating U.S. trials of robotic supply helicopters are well underway. The unmanned aviation marketplace is growing at a torrid pace and offers tens of thousands of new jobs, civilian start-up opportunities and next generation potentials for existing aerospace firms. Oklahoma Governor Mary Fallin and her chief science advisor are currently trying to secure some of this action for Oklahoma.
Getting Beyond the AA Crisis
Fashion a private/public university and philanthropically funded look at next-generation engines, fuels and air frame designs and next stage airliners -- a seeding project that would allow Tulsa private partners, academic folks and new comers from outside Tulsa to do pre-commercial and pilot projects on leading edge systems.
Kick off a multiparty training initiative that would allow aerospace unions and small companies to master new skills associated with unmanned aircraft systems, new materials, exotic fuel systems and allied topics.
Gin up an effort to complement the excellent unmanned aviation development project being crafted by Gov. Fallin -- an effort that is already positioning interested firms, university folks and startups to be players in the rapidly growing unmanned aviation market space and the outsized employment associated with it.
Look at including a big aviation "futures" development project in the next Vision 2025 round to fund these efforts.
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