Outsourcing: A look at some of the industry practices

Although the word outsource has only been around since 1979, many in aviation wish it would be stricken from the English language today.

ARSA’s reaction to the report’s findings on FAA inspection priorities was that the association has always called for sufficient FAA funding — including an adequate inspector workforce. Filler explains that at the airlines, certificated A&Ps frequently perform work that does not require an individual to be certificated — a consequence of carriers’ traditional staffing practices and not a safety, quality, or regulatory requirement. Certificated persons supervise non-certificated maintenance personnel at repair stations, which is both appropriate and in accordance with the regulations. Certificated persons approve the maintained product or component for return to service. Regulations require that repair stations function very closely with customers as a part of the customer’s quality system.

FAA oversight overseas

What about oversight and security? Is it an issue with foreign MROs?

“We have seen no issues here,” replies Hirshman. “In fact, we were recently involved with an MRO in the Middle East and it employed tighter security than any MRO in the United States that I have seen.”

Goodrich explains that oversight of overseas operations is spread over a very wide area. A few inspectors are assigned to the international field office in Singapore for oversight of facilities all over the Far East.

“There is no way we can possibly cover it all,” she says. “We normally do not have the time to even provide this kind of support to the States because we are seriously backed up for certifications and re-certifications of foreign repair stations.”

However, Filler says ARSA is comfortable with the airline and FAA oversight of foreign repair stations as the rules for U.S. and foreign repair stations are substantially similar.

“The foreign repair station is required to renew its certificate 12 months after initial issue and every 24 months thereafter,” he explains. “Because they are typically certificated by multiple NAAs (National Aviation Authorities) and are audited by the same types of entities that audit U.S. repair stations, the level of oversight of foreign repair stations is substantial. Of course, U.S. air carriers are held responsible for overseeing any repair station that performs work on their behalf, whether U.S. or foreign.”

Filler adds, “Popular media reports suggest that repair stations do not receive enough oversight. Repair stations are commonly audited by the FAA offices responsible for the repair stations’ certificates, the FAA offices overseeing the carrier, NAAs that have certificated the repair station, the airline customers, and various auditing and quality organizations. ARSA members tell us they are experiencing as many as 40 to 60 audits annually.”

According to Filler, TSA is expected to issue a Notice of Proposed Rulemaking (NPRM) this summer, outlining a security audit procedure and proposing additional security measures for foreign and domestic repair stations.

Lasting impressions

“Corporate culture is huge, especially the negative culture fostered by most of the union shops out there,” says Brinkley. “The union guys keep on complaining about the trend toward more outsourcing and jobs being lost, but management has no choice. The unions have created such a negative culture of wasted time and inefficient procedures that performing maintenance in-house is almost always more expensive than at a third-party facility.”

“It’s been about 14 years since I’ve been a line mechanic, and wow, have things changed,” says Hirshman. “I think this industry has built a cost structure (labor, capital, fuel, taxes) that it can’t sustain in this revenue environment. I also think the revenue environment is permanent, not temporary, which means, labor is going to have to fundamentally change the way it thinks about jobs (i.e. pay rates, work rules, job protection) in order to protect them for the long term.”

He continues, “I believe outsourcing will only grow going forward because the airlines have no choice if they want to survive. If unions can’t find ways to be more productive and competitive, once-sacred areas such as line main tenance will be the next to go. Once thought to be core, we are now seeing examples of hub and line outsourcing in the areas of ground operations and line maintenance.”

Brinkley adds, “The problem is, once a negative corporate culture creeps in to the workplace, it is very hard to turn around. It is like a battleship that is going full-speed ahead. You can turn it around, but it won’t happen immediately because of all the momentum that has built up.”

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