Airline Maintenance Outsourcing Risks
Abstract
Maintenance in the aviation industry is an essential factor in ensuring high standards of safety and security in airports. Airlines prefer outsourcing maintenance services due to the cost implication and maintaining operational efficiency. Maintenance services vary depending on the broadness and scope of the airline’s needs. However, there are many risks associated with outsourcing maintenance services. Outsourcing continues to raise many issues, for instance during the Valujet incident whereby, the outside contractor failed to properly supervise the removal and replacement of oxygen generators leading to fatalities. Lack of certified employees in the contract companied may lead to the emergence of tragic happenings. The Federal Air Agency (FAR) mandates airlines with the responsibility of its outsourced work. The Valujet tragedy lacked oversight and maintenance from the Federal Aviation Administration (FAA) (Outsourcing Problems, 2020). FAA inspectors and airline supervisors should work together in supervising maintenance services in the repair stations.
Airlines depend on third-party maintenance companies to conduct several maintenance tasks on the aircraft. Outsourcing maintenance services vary broadly depending on the scope and scale. Maintenance tasks may include servicing particular aircraft parts, performing D-check for the entire fleet, and engine overhauls (Qin, 2019). The main reason for outsourcing airline maintenance is to reduce the costs incurred by the airline. Outsourcing leads to a reduction in the number of skilled technicians needed at airports. Certain airlines lack a sufficient number of aircraft in justifying the facilities, personnel, and tools required for conducting maintenance internally.
Airlines make substantial savings when they outsource maintenance services. A maintenance company usually has multiple contracts and large influx which allows the contractor to complete maintenance tasks at relatively low costs as compared to internal maintenance operations. Additionally, the contractor is in a position to perform the maintenance tasks faster as compared to internal maintenance due to staffing impediments at the airline. However, outsourcing has its negative implications for instance, some contractors may lack adequate aircraft-specific expertise and has uncertified mechanics. Contractors hire non-certified mechanics to spend little on pays (Dobbs, 2008). Lack of enough expertise for technicians and mechanics could result in disasters.
The demand for outsourcing maintenance services is on the rise. According to a 1997 General Accounting Office report, estimations are that more than half of the United States maintenance services are outsourced to repairs shops and stations; this has resulted in a very competitive marketplace for the maintenance companies. The cost-saving implication may be the initial prospects for airlines outsourcing their services, but other factors emerge in the industry. For example, the airline may try to consider the quality of work performed by the vendor. Poor quality maintenance services could result in reduced dependability of the aircraft and as a result, may introduce tragedy eroding the already saved costs. The operator of the aircraft is responsible for the compliance of the vendor, regarding the approved policies and regulations. The Federal Aviation Administration (FAA) has a responsibility of oversight roles for the operator including the maintenance vendor and the respective repair stations (Dobbs, 2008). Over recent years, oversight of outsourcing maintenance services has been on the rise due to the increased number of plane crashes over a short time.
The FAA requires airlines to undertake regular maintenance on the aircraft at least once in two years. Maintenance is quite costly at the airline companies, an airline company can spend an average of 100 dollars per union mechanic in the United States for just one hour. The airline cuts that cost by half by contracting a non-union mechanic in the United States, who operates in the repair stations. An airline can save up to triple its savings by outsourcing the maintenance services in developing countries. Due to the cheaper costs, airlines take advantage of outsourcing the maintenance services to take advantage of cheap and readily available labor. However, as maintenance outsourcing gets more prevalent in the aviation industry for cost-cutting purposes, safety issues are getting more pronounced (Patel, 2020).
Outsourcing raises safety concerns due to factors related to the conduct of the vendor companies. The main issue for the vendor services is that repair and maintenance shops located overseas get difficult to maintain. There are a total of 4,227 repair stations located in the United States. Additionally, there are more than 700 overseas maintenance stations approved by the FAA in more than 70 countries (Office of Aviation Research Washington, 2003). FAA’s mandate is to monitor and inspect all the repair shops regularly in a system of checks and balances. According to the Department of Transport’s Inspector General, monitoring of all the repair shops is hectic and flawed. The Inspector-General reinstates that the FAA and aviation industry inspectors have not been effectively monitoring the airline maintenance operations. The Office of the Inspector General’s report Air Carriers’ Outsourcing of Aircraft Maintenance, Federal Administration Report establishes that there lacks supervision and inspection of many overseas maintenance and repair shops, that are meant to maintain safety standards and procedures in the United States. Specifically, the FAA lacked a system for determining how vast and supposedly where critical maintenance matters may occur. FAA lacks specific policies that govern the time when management inspectors have to visit the repair stations. Additionally, the FAA lacks enough controls in ensuring inspectors properly document findings under the national database and compare their findings with those of other inspectors.
Outsourcing maintenance services erode passenger safety. In the two sets of maintenance standards; airline-owned and FAA certified repair stations have to adhere to Parts 121 and 145 of the Federal Aviation Regulations. Additionally, critical exceptions have to be made in personnel and security standards such as duty-time limitations, background checks, and alcohol and drug testing (Science.gov, 2020). The explosion of outsourcing services results in the complexity of handling the regulatory standards as well as oversight which may increase the chances of the vulnerability of accidents thus compromising the safety of passengers.
There is increased homeland security risk due to the design and operations of vendor maintenance services. There are few standards to prevent terrorists from exploiting opportunities in the maintenance and repair stations (Quinlan and Hampson, 2019). For instance, terrorists may tamper with airline systems by inserting explosive materials into aircraft when they are undergoing maintenance and repairs. The Transportation Security Administration (TSA) is struggling to establish security regulations to curb terrorist attacks in foreign repair stations.
Effects due to the setbacks in outsourcing maintenance services include airplane accidents and incidents, the vulnerability of terrorist attacks, drug smuggling, billions of dollars lost in the airline industry, and air pollution from aircraft flying to and from the repair stations (Olaganathan and Mrusek, 2020). The main causes of the negative effects due to outsourcing of the services include outdated models of FAA for oversight and insufficient resources from the FAA and TSA.
Currently, there are four levels related to the aircraft management system. Each tier is propelled by a regulatory body instating the minimum standards for outsources airline maintenance, repair, and overhaul. The airline-owned maintenance services are under the stringent standards of Part 121 of the Federal Aviation Regulations (FARSs). The second level is the Domestic repair stations that are certified by the FAA under a less stringent FAR part 145. The third level is the foreign repair stations certified by the FAA under FAR part 145. Foreign repair stations have critical exceptions in personnel and security criteria. Non-certified domestic and foreign repair stations aren’t inspected or regulated by the FAA (David, 2008). Non-certified repair stations are limited to the maintenance services they can offer.
In December 2005, the Office of the Inspector General DOT established that there are over 1,400 non-certified repair facilities which include 100 in foreign nations that serve US carriers. 21 of the foreign and domestic non-certified maintenance repair stations were performing maintenance that was critical for the airworthiness of the aircraft. FAA lacks adequate inspectors to conduct supervisory and inspectorate services in the numerous repair stations (Van, 2007).
Conclusion
Airlines enjoy the benefits of outsourcing maintenance services including saving costs and concentrating on other airline tasks. However, the maintenance industry faces challenges that demean the efficiency of the aviation industry. There is a sense of urgency in furnishing the regulatory framework governing the outsourcing of airline maintenance services. Currently, there is a growing risk to citizens and the economy of the United States, passengers, and the environment, should the loopholes lead to erroneous effects in the maintenance services for instance exposure to opportunities by terrorists and lack of required professionalism.
Therefore, a sole regulatory standard should be formulated in governing the operations of foreign and domestic repair facilities (HR Legal Sources, 2020). FAA inspectorate should be increased for both overseas and domestic maintenance facilities. Airlines that outsource to international repair stations should adhere to the Environmental Protection Agency (EPA) of holding high environmental standards with regards to the disposal of hazardous wastes associated with aircraft repair. The maintenance entities should adhere to all regulations as per the Occupational Safety and Health Administration (OSHA). Additionally, all maintenance stations should equip with adequate safeguards for instance access to the aircraft, personal background checks and part inventory to inhibit terrorists from exploiting chances of harm. Adherence to the regulatory standards shall enhance efficient operations with regards to the quality of services, safety, and security of airlines.
References
Aircraft maintenance outsourcing: Topics by Science.gov. (2020). Retrieved 10 May 2020, from https://www.science.gov/topicpages/a/aircraft+maintenance+outsourcing
David A. Dobbs, (2008) “Air Carriers’ Outsourcing of Aircraft Maintenance,” US Department of Transportation, Office of the Inspector General, Memorandum to the Acting FAA Administrator,
Office of Aviation Research Washington, D.C. 20591 (2003). Practices and Perspectives in Outsourcing Aircraft Maintenance Retrieved 10 May 2020, fromhttps://www.faa.gov/about/initiatives/maintenance_hf/library/documents/media/human_factors_maintenance/ar02-122.pdf
HR Legal Sources (2020). Retrieved 10 May 2020, from https://www.hg.org/legal-articles/airplane-maintenance-outsourcing-tests-bounds-of-safety-18872
Olaganathan, R., Miller, M., & Mrusek, B. M. (2020). Managing Safety Risks in Airline Maintenance Outsourcing. International Journal of Aviation, Aeronautics, and Aerospace, 7(1). Retrieved from https://commons.erau.edu/ijaaa/vol7/iss1/7
Outsourcing Problems . . . Again: Outside contractors to get increased FAA surveillance . . . right!. (2003). Retrieved 10 May 2020, from https://www.aviationpros.com/home/article/10387103/outsourcing-problems-again-outside-contractors-to-get-increased-faa-surveillance-right
Patel, D. (2020). The Pros And Cons Of Outsourcing. Retrieved 10 May 2020, from https://www.forbes.com/sites/deeppatel/2017/07/17/the-pros-and-cons-of-outsourcing-and-the-effect-on-company-culture/#5548b43b562d
Qin, Y. (2019). Optimization of aircraft hangar maintenance planning under MRO outsourcing model (Doctoral dissertation, The Hong Kong Polytechnic University).
Quinlan, M., Hampson, I., & Gregson, S. (2013). Outsourcing and offshoring aircraft maintenance in the US: Implications for safety. Safety Science, 57, 283-292.
Van Wagner, K. (2007). Cutting Costs and Cutting Corners-The Safety Risks Associated with Outsourcing Aircraft Maintenance and the Need for Effective Safety Oversight by the Federal Aviation Administration. J. Air L. & Com., 72, 631.