PRNewswire FORT WORTH, Texas Oct. 22 :

American Airlines today announced it has reached an understanding with the
city of Kansas City and the state of Missouri that would allow the company
to retain a portion of its maintenance operation in Kansas City. Under the
plan, the company would sign a 25-year lease for its wide-body hangar and
associated shops at its Kansas City Maintenance Base, where maintenance
work is done on the company`s wide- body fleet.

“Getting to this point has taken a remarkable demonstration of commitment
on the part of state and city leaders,” said Gerard J. Arpey, president
and CEO of American Airlines. “My sincere appreciation goes to Kansas City
Mayor Kay Barnes and Missouri Governor Holden for all of their support.”

The understanding with Kansas City and Missouri would complete the
company`s plans for allocating work more efficiently among its three
overhaul bases. American said it will maintain the size and scope of its
current operation at its Fort Worth Alliance Maintenance Base. American
will continue to work with the city and state leaders on measures that
will further lower American`s operating costs at the Fort Worth facility.
As previously announced, the airline will add jobs at its Tulsa, Okla.,
base. American had considered closing one of its three bases to adjust for
the reduction over the past two years in its fleet size.

Under the Kansas City plan, the company would phase out its narrow-body
maintenance operation at the base. The company expects that any near-term
employment levels will be affected mostly through attrition.

The package of support from Kansas City includes:—$40 million to be
used primarily for wide-body hangar improvements;—$37 million in
additional funding for facility modifications and enhancements during the
lease term; and—$4.5 million of marketable tax credits for asbestos
remediation.

This support from the cities and states where American operates the bases
will help the company with its priority to keep the majority of its
maintenance work in-house as long as it can do so and remain competitive.
Currently, American outsources the least maintenance work of any other
major carrier.
“This has been one of the most challenging periods in this industry`s
history,” Arpey said. “It is only through remarkable support from the
cities and states where we operate bases that we were able to protect jobs
and lower our operating costs enough to maintain an important presence in
those communities. With this support from Kansas City, Tulsa and Fort
Worth, American has obtained more than $100 million in incentives, as well
as achieving operating efficiencies at the bases.

“It was always our hope to retain all three of the bases and to protect as
many of our employees as possible who perform such critical functions,”
Arpey said. “I`m glad that working together with the communities and the
Transport Workers Union (TWU), we found the means to retain all three
operations. A large part of the credit for our decision to retain a
maintenance presence in Kansas City must go to the International TWU staff
as well as TWU Local leaders. The fact that we are making this
announcement today is evidence that they represented their members well.”

“I`d like to thank all of the members of the TWU who continued to work
with the highest level of professionalism throughout these long and
difficult discussions,” said Jim Little, director Transport Division and
international administrative vice president of TWU.

The TWU is one of the unions that has embraced American`s effort to change
the way it does business. The company has adopted a new spirit of
collaboration with its unions and nonrepresented employees as a logical
way to meet industry challenges.

American Airlines is the world`s largest carrier. American, American Eagle
and the AmericanConnection carriers serve nearly 275 destinations in 50
countries and territories with approximately 4,300 daily flights. The
combined network fleet numbers more than 1,000 aircraft. American`s award-
winning Web site, AA.com, provides users with easy access to check and
book fares, plus personalized news, information and travel offers.
American Airlines is a founding member of the oneworld alliance.

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