Global Outsourcing of Aircraft Maintenance

Abstract

Before the airlines were deregulated, the majority of air carriers conducted their maintenance in-house. After deregulation, with competitive pressures mounting and airlines failing and starting up seemingly simultaneously, the outsourcing of maintenance became more prevalent. Not restricted to U.S. airlines, outsourcing maintenance has become a global practice. Factors involved in the outsourcing decision range from a startup not having the capital to develop their own in-house maintenance program, to legacy carrier's cost cutting efforts, and all points in between. This paper will address specific aspects of the global outsourcing of aircraft maintenance. For the purposes of this paper, Maintenance, Repair, and Overhaul (MRO) and maintenance are used synonymously. Global Outsourcing of Aircraft Maintenance For those who study the airline industry, and more specifically, aircraft maintenance, it is a well-known fact that airlines are not in the aircraft maintenance business. However, the importance of quality, compliant, cost effective maintenance cannot be overstated. Estimates for the total cost of aircraft maintenance range from 10% to 15% of an air carrier's budget