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Commercial Aviation Maintenance Outsourcing: Pros and Cons

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Executive summary

The commercial aviation industry is very important to the economy of many countries. This is because it is the fastest way through which people and goods can be transported from one point to another locally and worldwide. However, this industry is very sensitive and if not handled well, it can lead to loss of people’s lives as well as goods that may be of very high value. As a matter of safety, aircrafts must properly maintained and functioning optimally, if the stakeholders are to obtain desirable results and avert catastrophes.

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Commercial aviation companies have outsourced workers from outside companies and often use third party maintenance providers for their aircrafts. These workers are hired either temporarily or on a regular basis, depending on the nature of the project. The main reason why most companies practice outsourcing is because they want to cut on their operation costs so as to improve their efficiency. Another reason why aviation companies are outsourcing is so that they are able to access new technology that they may not have not have been able to invest in.

However despite the perceived benefits, outsourcing has been criticized for a variety of reasons such as causing domestic workers to loose their jobs to foreigners and also lessen workers’ productivity as they fear that they would be replaced. Any commercial aviation company that plans to have outsourced labor should therefore consider these pros and cons carefully before making any such decision.

Introduction

The commercial aviation industry is very important to the economy of many countries. This is because it is the fastest way through which people and goods can be transported from one point to the  other both domestically and globally. Lack of air transport would lead to a considerable amount of time would be wasted in transit as the other means of transport such as road, rail and sea are comparatively slower. For those who count on speed, efficiency and comfort, air transport is undoubtedly the best choice compared to other forms of transport especially over long distances or when handling perishable and light cargo. However, this industry is very sensitive and if not handled well, it can lead to loss of people’s lives as well as goods that may be of very high value. Airplanes crash for a variety of reasons but when it is due to poor maintenance of aircrafts, there is cause for alarm. As a matter of safety, therefore, the commercial aviation sector must have its means of operations such as airports, aircrafts, watchtowers, radios, and computers among others, properly maintained and functioning optimally. This involves allocating a reasonable portion of the industry’s budget towards maintenance work which may involve hiring and training of a technical and highly skilled work force as well investing in equipment and technology used for maintaining aircrafts. Some commercial aviation companies find hiring skilled technical staff to be costly to their wage bill, and hence opt to outsource this portion of their staff force.

Purpose of the paper

This paper seeks to analyze the commercial aviation maintenance outsourcing process, identifying its advantages and the disadvantages to the industry, the workers and the general public. This will help all the stakeholders of the industry to plan ahead before they decide on such a process.

Definitions

Aviation:  Activities that involve operating aircrafts, and machinery for the same. Aviation also refers to personnel and the regulatory bodies that are related to aircraft operation plus the airplane manufacture companies (Babylon, 2007).

Commercial aviation: The business of operating aircraft that carry passengers for commercial purposes or for a profit. Examples of commercial airlines include United Airlines, American Airlines, Continental Airlines. Types or models of the airplanes that are operated in commercial aviation include the Boeing  and Airbus among others (SpaceDay, 2007). In general, the term can describe that part of civil aviation involving the operation of aircrafts for hire.

Outsourcing: The assigning of responsibilities for some or all tasks and activities that are involved in the development, running or maintenance of a system to someone else that is outside of the company or an organization (Damacoc, 2007). This is done to lower the company’s operating costs.

Air carrier: A commercial system of air transportation that consists of both international and domestic scheduled and chartered service. The system contains air carriers, supplemental air carriers and commercial operators of large aircraft as well as air taxis and air travel clubs. The Federal Aviation of the United States defines an air carrier “as any citizen of the United States who undertakes whether directly or indirectly or by lease or any other arrangement, to engage in air transportation” (RITA, 2009).

Importance of the topic to the air carriers

Proper aviation maintenance is required of any commercial airline company. Analyzing the issue of outsourcing is therefore very important to the air carriers as it will assist them to plan adequately before they engage in any contracting with outsourcing experts. They will have full information on the benefits of outsourcing as well as the disadvantages that are associated with the process. The air carriers will also be prompted to do further researches on the topic to expand on the ideas that have been addressed on this research paper.

Commercial Aviation Maintenance Outsourcing

Commercial aviation companies are turning to outsourced workers from outside companies and often use third party maintenance providers for their aircrafts. These workers are hired either temporarily or on a regular basis, depending on the nature of the project. The hired workers may be just a few but at times a whole firm or firms are hired (Makhnach, 2009).

The outsourced work varies in scope and scale and may include servicing a specific component, engine overhauling or performing a D check for a whole aircraft fleet (U.S. Department of Transportation, 2003). All aircrafts are subjected to periodic checks- checks A, B, C, and D- after a certain period of time. An “A” check is done after about five hundred hours of flight or a month. This is usually carried out for a whole night but if many defects are observed, it can take longer for repair. The “B” check is also done overnight and is performed after every three months while “C” check is done after two thousand and five hundred hours of flight or between twelve and eighteen months during which the plane is placed in the hangar (maintenance base). Finally, the D check which is also referred to as the Heavy Maintenance visit is performed after approximately four or five years of flight. Many of the aircrafts at this level are either stored or scrapped (Aerosphere, 2000).

Maintenance outsourcing can be done for a specific type of aircraft, or for specific maintenance function such as in maintenance of a specific part of the aircraft engine (U.S. Department of Transportation, 2003). There are several companies that offer aviation maintenance services, a good example being the Duncan Aviation Inc. The company has experienced airframe mechanics that provide services for any airframe maintenance event, whether scheduled or as an emergency.  Other service providers within this company include A& P technicians, IA- aircraft inspectors, and research and records technicians (Duncan Aviation, 2009).  They operate on a twenty four hour basis, seven days per week. In addition, the company has been authorized by many aviation companies to do their maintenance. Some of the services that they offer include pre buying evaluation, bolster beam repairs, tool calibrations, removal of wings that is followed by corrosion repairs, the replacement of junction plate, repairing of tanks and any fuel leak, replacement of horizontal stab bushing, landing gear overhaul and checking of dimension AC. They also install the electronic flight bags, upgrades flight deck and cabin and entertainment, safety systems, weather systems plus phones and high speed data.  Interior services provided include dynamic seat upholstery, tables and drink rails, lavatories among others. The also conduct maintenance works such as painting, engine repair, and APU repairs (Duncan Aviation, 2009).

There is an increasing need of maintenance services which has led to an increase in the number of vendors. According to the United States’ General accounting office report of 1997, half of the aviation maintenance work is done by outsourced companies and this has created very high competition in the third party aviation maintenance field ((U.S. Department of Transportation, 2003). It should be noted that despite the fact that the maintenance work is performed by third party vendors, it is the responsibility of the airline management to ensure that the vendors respect the approved policies, requirements and procedures. Lack of proper maintenance can be catastrophic as was witnessed in the year 1996. ValuJet 592 that was en route from Miami International airport in Florida to Hartsfield-Jackson Atlanta International Airport crashed in a swamp in Brown Farm Wildlife Management area of the Everglades. Two pilots and three flight attendants plus all the one hundred and five passengers perished. The results showed that the ValuJet maintenance contractor had placed several chemical oxygen generators that had expired (Langewiesesche, 1998).

Factors leading to Commercial Aviation Maintenance Outsourcing

There are several challenges facing commercial aviation maintenance stations within the commercial airlines which have prompted the companies operating them to outsource this section. The first problem is lack of qualified maintenance employees (U.S. Department of Transportation, 2003). There are very few qualified aviation maintenance workers and as the aviation industry continues to grow, more qualified workers are needed to match the ever-changing technology. This has led to companies competing for the few available ones, meaning that companies may not be in a position to employ them on a permanent basis as they keep on moving within the different companies in search of better prospects.

Another challenge is the high cost of investment in aviation spare parts. The investment of spare parts per aircraft is fifteen percent of the aircraft’s purchase price. This makes many aviation carriers unwilling to stock or maintain spare parts but instead get them from spare providers or third party firms when need arises, a process that is less costly. The other challenge associated with spare parts is that with many manufacturers coming up, it is hard to find spare parts that are approved.  This has prompted the FAA in USA to describe the criteria for approving the spare arts (U.S. Department of Transportation, 2003).

Advantages of Commercial Aviation Outsourcing

Outsourcing in commercial aviation is advantageous for a variety of reasons, the first one being access to cheaper labor. Outsourcing is more cost efficient for commercial airlines in the sense that they do not hire permanent workers who would have to be given full salaries, benefits and compensation like a full time employee. In addition, commercial airlines would save further on labor rates if the work is outsourced to some foreign countries particularly developing countries that tend to have lower labor rates than in the US (Lovetoknow, 2009). Outsourcing workers lowers the company’s operating costs because even though the contract workers may be paid a higher salary than the regular employees, the hidden costs such as transportation, house allowances, medical covers, overalls, meals among others are deducted. Furthermore, contract workers provide their own facilities and infrastructure such as computers, machinery resulting in reduced operating costs for the commercial arilines (U.S. Department of Transportation, 2003).

 Through outsourcing, the aviation industry is able to overcome the shortage of qualified aviation maintenance personnel. The President of Embry Riddle Aeronautical University, George Ebbs once stated that the number of aircraft technicians who are trained and also experienced is not parallel to the rate of the expansion of the industry. The reasons that he gave were one, the high cost of getting an FAA Airframe Power plant Certificate, use of training equipment and curricula that are archaic and which can not fit into the modern industry technology. To fill this gap, airlines maintenance divisions and repair stations have to rely with contract workers; both unlicensed and licensed. This enables the companies to cover for unplanned and seasonal peaks for specific projects, specialist maintenance and maintenance loads (U.S. Department of Transportation, 2003).

 Another advantage of outsourced labor for the commercial aviation industry is access to better technology and facilities. It may prove too costly for every company to invest in the latest technology and equipment. It would be another significant investment to research and then train own workers on the scientific and technological advancements of the industry. For this reason, the commercial aviation industry may prefer to rely on third-party firms who have the latest technology and equipment (Lovetoknow, 2009). It should be noted that each aircraft from different companies may require its own maintenance technology and thus it would be too expensive if the company hires new employees every time new equipment or a new aircraft is introduced into the market. The better option would be to outsource the third party worker who may have knowledge on that particular area and who will leave when the work is done. If another different aircraft needs maintenance, similar process is repeated.

Another benefit of outsourcing is that there is increased productivity when contract workers are used instead of the company based employees. Experts argue that employees who work on contract terms are likely to work for longer hours than those employed on a permanent basis. Not so many qualified workers are willing to work permanently in an industry if they are working at odd hours. However third party workers are ready to work even for twenty four hours working at all shifts. This is because the outsourced employees feel under pressure to finish the work and be paid contrary to the company based workers who are assured of their salaries whether they complete the assignments or not (Lovetoknow, 2009).

Another outsourcing benefit is that the industries will have more time to focus on their core business. The core business of commercial aviation companies is to transport people and goods from one point to another; safely and profitably. Maintenance and repairs are sideshows in pursuit of the goal. Thus the company should not allow all its energy to be channeled into work which is not its main goal. For this reason, they may need to contract workers for the other work as they concentrate on their main goal (Lovetoknow, 2009).

Another advantage of outsourcing is that the company will be in a position to engage in new developments and projects at a faster rate than if it were to rely on its employees. It usually takes several weeks or even months to interview, hire and train the right people. The company may also need to construct new facilities that may take time to complete. If it were to use contract workers, such projects may even take one week (AllBusiness, 2009).

Finally, outsourcing reduces business risks. All businesses, no matter the field have some level of risks. These are generated by the quick change of markets, government regulations, competition, financial conditions as well as technologies. The providers of the outsourcing will manage any of these risks for the business and in most cases they may be more qualified than the company management to do so (AllBusiness, 2009).

Disadvantages of Commercial Aviation Maintenance Outsourcing

Despite the evident advantages, commercial aviation maintenance outsourcing also has disadvantages. First of all, the regular employees may feel that their jobs are threatened. When employees realize that their jobs are being outsourced, they will most likely feel insecure and the next action for them may be to start searching for other jobs or just leave their current jobs unceremoniously. Demoralization is not good for any labor force as it means that workers’ performance will not be up to standard, leading to less productivity (Lovetoknow, 2009).

The second disadvantage is that the company may loose control of its business operations since it has allowed another identity to handle the affairs of the business. Also, maintenance may not be done in accordance with the policies or structures of the company as the third party firm also has its own policies. This may lead to conflict between the outsourcing firm and the company or their workers. When the management is in total control of every part of the operation, it can make any decision that it feels is beneficial to the business but in outsourcing, it is not in complete control. It is also possible for the outsourced workers to sign the contract just for the sake of monetary gains and thus end up doing shoddy jobs (Lovetoknow, 2009).

The aviation company is also vulnerable to loose data that it considers secured. Outsourcing workers perform duties for different companies and thus may come across some of the trade secrets and exchange with other companies for money.  This means that the company should be very careful on determining on which details it should allow the temporary workers to access to.

Another major disadvantage that has caused commercial aviation outsourcing to be criticized especially in the nations like the United Kingdom and United States is that it has contributed to the loss of many jobs by locals to foreigners (Cyber Futuristic, 2004). Several companies are pursuing maintenance experts from developing nations such as India so that they can pay them less for the same work. They will also avoid some other costs such as insurance, medical cover and pension contribution. This puts the locals at a disadvantage as they may find it hard to get employment even when jobs are there. Problems such as contractual misunderstanding may prompt outsourced workers to take legal action against the company and this would definitely mean loss of resources such as money and time (Cyber Futuristic, 2004).

Conclusion

       Today business process outsourcing is conducted in all several industries including the commercial aviation industry. The main reason why most companies practice outsourcing is because they want to cut on their operation costs while improving their efficiencies.  For example , they are able to access technology that they may not have acquired at that particular time and they can complete their tasks much earlier than it could have happened if they utilized their own employees. However despite the perceived benefits, outsourcing has been criticized for causing locals to loose their jobs to foreigners and also lessen workers’ productivity as they fear that they would be replaced. There is also a possibility that outsourced workers may be under qualified and thus do imperfect work. They are also exposed to company secrets which they may reveal. Any commercial aviation company that plans to have outsourced labor should therefore consider these pros and cons carefully before making any such decision.

References

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     from http://www.allbusiness.com/human-resources/workforce-management-hiring/1084

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     http://www.babylon.com/definition/aviation/English

 Damacoc. (2007). Data warehouse glossary. Retrieved March, 4th 2009 from

     damacoc.org/presentations/2007_04_11_Adelman_DWGlossary.doc

Duncan Aviation Inc. (2009). Business aircraft service & support. Retrieved March 4, 2009,

     From http://www.duncanaviation.aero/?gclid=COvE2ufNiJkCFSHyDAodIDmwmg

Langewiesche W. (1998, March). The lessons of ValuJet 592. The Atlantic online. Retrieved

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LoveToKnow. (2009). Pros and cons of outsourcing. Retrieved March 4, 2009, from

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Olga Makhnach Olga. (2009). Pros and cons of outsourcing. Retrieved March 4, 2009, from

     http://ezinearticles.com/?Pros-and-Cons-of-Outsourcing&id=519756

RITA. (2009). Air carrier. Retrieved March, 4th 2009, from

     http://www.bts.gov/dictionary/search.xml

SpaceDay. (2009). Glossary of aeronautics terms. Retrieved February, 4th 2009, from

    http://www.spaceday.org/index.php/Glossary-of-Aeronautics-Terms.html

US Department of Transportation. (2003). Practices and perspectives in outsourcing aircraft

     maintenance. Retrieved March 4, 2009, from

     http://www.tc.faa.gov/its/worldpac/techrpt/ar02-122.pdf

 

Cite this Commercial Aviation Maintenance Outsourcing: Pros and Cons

Commercial Aviation Maintenance Outsourcing: Pros and Cons. (2016, Sep 14). Retrieved from https://graduateway.com/commercial-aviation-maintenance-outsourcing-pros-and-cons/

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