“Well-managed third-party maintenance providers possess a range of capacities and experiences that can improve aircraft turnaround time, reduce maintenance downtime and increase aircraft availability,” Best asserts.
Line work that can be outsourced to SRT includes maintenance through A checks, non-destructive testing, cleaning, fueling, de-icing, cabin maintenance, inflight entertainment, aircraft-on-ground recovery and troubleshooting.
Best says cost savings depend on scale economies and occur in many areas; for example wages, pensions, training, clothing, insurance, health costs, tooling, equipment, property, heating, lighting, communication and transport.
One major hurdle to outsourcing is that line maintenance is critical to operations, so third parties must take ownership and be accountable for results. Providers must commit to key performance indicators (KPIs) for maintaining quality and staying on time and on-budget. And customer airlines must have the staff and processes to ensure compliance. “We have regular and productive communication to track performance KPIs, and services are developed in line with airline strategic aims,” Best summarizes.
He says outsourcing line maintenance is more likely when a carrier has four or fewer aircraft based at an airport. But other factors also matter. What is the airline's maintenance strategy? What type of support is required? Is the airport a seasonal or foreign destination, both of which are often outsourced? Is the airline a member of International Airlines Technical Pool (IATP) so it can call upon IATP members for part-support? What local facilities and business licenses does the airline have? Finally, is there a service provider available with the necessary aircraft type approval?
All types of line maintenance can be outsourced to third parties. “There are no objective technical reasons that prevent outsourcing in most situations,” says Jonas Butautis, CEO of FL Technics. “But decisions to outsource are politically and socially sensitive.”
Butautis downplays flight counts as a critical factor. The key is “benchmarking your in-house solution with a quality alternative at the same airport.”
KPIs are often given as a reason not to outsource, but Butautis says it is easier to hit desired KPIs with strict contract management of an outsourced supplier, including heavy fines for non-performance, than with in-house staff.
Butautis argues that even home-base stations can save costs by outsourcing or partnering with the right providers. “The U.K. TUPE [Transfer of Undertakings, Protection of Employment] employee-transfer system makes savings more challenging to achieve.” But even with TUPE, “savings can range from 15-25%.” Moreover, “outstations are always more cost-effective to outsource, if quality local maintenance organizations are present.” Butautis estimates savings of 15-60% at outstations, depending on how inefficient in-house work is.