Maintenance for aircraft in foreign shores
The international outsourcing of maintenance of US airlines is a significant turn of events. It was noted that as early as several years ago, US airline companies were the sole maintenance providers of their own aircraft. The Federal Aviation Administration (FAA) mandates that airlines to revamp all of their planes every two years or earlier, and little “armies” of union airline mechanics retooled and restored the planes. However, by 2002, when airlines were beginning to feel the “red ink” creeping into their bottom lines, airlines began to find ways to cut down on costs. One the largest costs that airlines sought to control was maintenance costs.
If an airline would repair and overhaul its planes in the United States, the costs would be at least $100/hour for mechanics connected with the worker’s guild. This amount would be inclusive of upkeep and other associated costs. Compared to this cost, the airline would only spend a little more than half the amount at a separate, non-unionized facility in the United States. Moreover, the airline will be able to even lower that price if it would opt to send the work to a developing economy, such as El Salvador, for example (Zwerdling, 2009, p. 1).
For the last decade, airlines were buffeted by a wave of financial catastrophes. The “ingredients” of this financial “typhoon” were a combination of cutthroat downsizing for customers online, the 9/11 debacle, low budget airlines, and skyrocketing fuel prices. These confluences of factors have forced airlines to turn to more inexpensive methods and practices to maintain their aircraft. However, four of the larger airlines have since become insolvent, and been trying to shed off maintenance costs to just to survive the competition in the industry (See Figure I).
A number of airlines-Delta Airlines, US Airways, and United Airlines-grappled with insolvency in the past years, and owing to cost cutting and downsizing operations, these now outsource their maintenance needs to other companies. The large airlines send their maintenance needs to MROS (Maintenance, Repair, and Overhaul) facilities. Here, locally based repair and maintenance facilities try to outbid such companies like Ameco that employ lower waged Chinese employees in Beijing. Nevertheless, there are questions that hound the practice such as compliance to safety requirements and regulations and other issues (Rentz, 2011, p. 1).
The dilemmas hounding outsourcing of aircraft maintenance is not that is limited to one particular airline; it is one plaguing the industry. The largest overhaul and maintenance facilities are located in countries such as El Salvador and China; there is no stringent oversight or regulatory framework in these countries. In addition, there are absolutely no quality control assurance protocols, and there is no concept or definition of what type of maintenance was done for that period. The only time that the “maintenance and repairs” will become evident is when there is an “in-flight emergency.”
The general public knows about the protocols that are used to maintain and repair the planes and the efficacy of the practices and regulation of these practices in outsourced aircraft maintenance facilities. According to consumer rights advocacy groups, the main concern in outsourcing aircraft repair and maintenance overseas and to non-regulated facilities is not the process of repairing itself, but the inspection and the regulation of the repair process. Industry reform proponents have called on the industry stakeholders to restructure the practices as deficient regulation will amplify the fears not only of the public, but also of the pilots that fly the planes who doubt the airworthiness of their aircraft.
However, the FAA, the agency mandated to oversee and monitor the industry, echoes the frustrations of other groups as well. Prior to outsourcing, the FAA monitored integrated, streamlined facilities of the airlines; with outsourcing, the tasks are done in a number of facilities in different countries, and with FFA regulators spread almost wafer thin, the FAA depended heavily on the inspections done by agencies accredited by the FAA. Only 100 overseas-based FAA regulators oversee more than 700 facilities in other countries (Rentz, 2011, p. 1).
With airlines aggressively looking for ways to cut down expenses and raise their financial positions, most of the work is done at both local and foreign repair and maintenance facilities. Unfortunately, majority if not all of these facilities are not compliant with the stringent regulations given by the FAA and the Transportation Security Administration (Coalition to Legislate Aircraft Maintenance Outsourcing Reform, 2008, p. 2).
One of the most disturbing reports that come from this event is the doubt on the quality and authenticity of the parts put in foreign repair facilities. Much of the parts were transported by rented trucks. Many of these parts’ origins and manufacturers were untraceable and many of the parts that were confiscated and sent to FAA documented storage facilities were sold back to the MROs after the FAA regulators left the area (Rentz, 2011, p. 1) (See Figure II).
Aside from dubious parts, one other problem is the allegations that these facilities have less than sterling drug and alcohol testing regimens. The FAA is undertaking notes and proposals on an “Advanced Notice of Proposed Rulemaking (ANPRM) geared to obligate these foreign based FAA accredited repair and overhaul facilities to have their employees undergo stringent testing programs. This testing policy will be applied to all service providers that provide maintenance, repair, and other “safety-sensitive” tasks on American airliners. Consonant with the Congressional directive for the policy enactment, the examination program must acquiesce with FAA established standards as well as the prevailing laws of the country where the repair and maintenance facility is found (Lombardo, 2014, p. 1).
The ANPRM starts the implementation of the 2012 FAA Modernization and Reform Act. At present, overseas-based repair stations that do maintenance and repair works on American airlines do not mandate drug and alcohol testing that is mandated for stations based in the United States. By applying all these requirements on foreign based stations, it is hoped that the safety issues and risks that are thought to be innate in foreign maintenance station-done work on American airlines will not in any way threaten the level of safety in the US.
Though the ANPRM is an initial step to the enactment of the proposed regulation and law, the projected law is a critical and long-awaited step in the long term campaign to obligate foreign based repair stations to the same stringent laws and regulations that are being implemented in domestically-based repair stations (Transportation Trades Department, 2014, p. 1).
The proposed implementation of the policies to equalize the position of foreign and local repair stations is expected to provide a level of parity for American airline technicians. However, it is being argued that increased drug and alcohol examination will not increase the level of safety in airlines; it only means that persons with illegal drugs and excessive amounts of alcohol in their blood will be identified (Lombardo, 2014, p. 1). What must be done is that certification programs must be applied to all facets of the process, rather than just allow private airlines to freely choose their own facilities based on price rather than safety records and competence.
Coalition to legislate aircraft maintenance outsourcing reform (2008) “Aircraft maintenance outsourcing issue.” Retrieved 16 December 2014 from <http://businesstravelcoalition.com/campaigns/outsourcing/outsourcing_issue_analysis.pdf
Lombardo, D.A. (2014). “FAA proposes rule in maintenance outsourcing practices.” Retrieved 17 December 2014 from <http://www.ainonline.com/aviation-news/business-aviation/2014-03-19/faa-proposes-rule-maintenance-outsourcing-practices
Net Names (2014) “Counterfeit aircraft parts in the USA.” Retrieved 16 December 2014 from <http://www.netnames.com/blog/2014/03/counterfeit-aircraft-parts-in-the-usa/
Rentz, C. (2011). “Airlines outsource repairs, but cost-cutting leads to weaker oversight.” Retrieved 16 December 2014 from <http://investigativereportingworkshop.org/investigations/flying-cheaper/story/outsourcing-airline-maintenance/
Rohrliche, J (2012). “Outsourcing severely compromises airline safety, say industry insiders.” Retrieved 16 December 2014 from <http://www.minyanville.com/sectors/transportation/articles/mechanics-American-Airlines-aircraft-Larry-Pike/10/1/2012/id/44561?page=full&refresh=1
Transportation Trades Department (2014). “TTD Supports FAA effort to raise the bar on outsourced aircraft maintenance.” Retrieved 17 December 2014 from <http://www.aviationpros.com/press_release/11579961/ttd-supports-faa-effort-to-raise-the-bar-on-outsourced-aircraft-maintenance
Zwerdling, D (2009). “To cut costs, airlines send repairs abroad.” Retrieved 16 December 2014 from <http://www.npr.org/templates/story/story.php?storyId=113877784
Figure 1: Maintenance costs for airlines. Source: Zwerdling, 2009
Figure 2: Counterfeit parts sources: Source: Net Names, 2014