There is nothing new about outsourcing (the practice of obtaining components from a third party). No-one expects an airline to make the tyres for its aircraft, and many successful carriers do not undertake their own heavy maintenance.
The trend to outsource more work and concentrate on core services has led to debate about what "core services" are. And created the spectre of "virtual airlines". This is of growing concern to airline employees, customers and regulators. Employess nervousness has been typified in the current industrial unrest at British Airways, particularly among ground workers protesting at the sale of BA's catering services.
Cross-border outsourcing can blur corporate responsibility to employees and customers, says Capt Bill Archer of the European Cockpit Association (ECA), warning: "Its global nature makes the airline industry the perfect opportunity for employers to experiment with new employment concepts." On 2 July, the International Federation of Airline Pilots (IFALPA) held a conference in Brussels, Belgium, on "the implications of outsourcing in the liberalised European Union aviation market." This event attempted to define what airline outsourcing is in practice, and to discover whether it is the monster which some believe it to be.
EC concern
IFALPA is not alone in its belief that the subject needs examination - the European Commission (EC) has already set up a study group to examine the social effects of airline-labour outsourcing and will report in September. This has been confirmed by EC Transport Directorate principal administrator Neil Bullough, present at the IFALPA as an observer.
Most unskilled tasks such as ramp services and de-icing have been outsourced in the USA, because when they were in-house jobs the Machinists' union compelled airlines to pay skilled rates for them, explains Capt Duane Woerthe, who is a Northwest Airlines executive director, a pilot and a US Air Line Pilots Association representative. He also emphasises the fact that, with the exception of Southwest, a fully unionised airline with happy industrial relations, low-cost carriers have only 3% of the total US domestic market. Woerthe maintains that, at 3%, these operators, which usually outsource extensively from the airline's birth, constitute only a niche market, so they are not yet a reliable role model for the industry as a whole.
Stateless employees
Lufthansa cabin-crew representative Ingo Marowski says that crew unions are worried that a new class of "stateless people" is being created by global airline alliances, where an airline of one country employs foreign crew and bases them in a third state. He quotes an example of a stewardess employed under such circumstances who became pregnant and found that she had no rights to maternity leave or any job protection.
The ECA's Archer is concerned about unfetered internationalism. "The main issue is that outsourcing can blur who is responsible for safety," he says, adding: "we could see our industry going the way of the merchant-marine industry: flags of convenience, with the loss of domestically sourced jobs."
He cites the example of defunct UK charter carrier Excalibur Airlines which flew in some of its pilots from Bulgaria each week for flight deck duties.
IFALPA's Capt Ted Murphy points out that the International Civil Aviation Organisation's Chicago convention still assumes that the state of registration of an airframe is the same as that of the operator. An ICAO resolution on "lease, charter and interchange operations" has been drawn up, but is still not ratified, Murphy says.
Archer draws a distinction between service industries and manufacturers, citing car-building: "Motor manufacturing is another industry which has a global nature. Cars can be made where costs are low and shipped to where the customer is. Our industry is different. We have to produce toe product where the customer is."
Woerthe expands on the difference, explaining: "To the members of the public, airlines are not just another business. Public trust in airlines to provide safety is important…the public has a right to more accountability, and that becomes more difficult with outsourcing."
If operational fundamentals are outsourced through extensive wet-leasing, franchising or contracting-out, Woerthe warns, particularly if the contracts cross borders, anybody due compensation after an accident could wait interminably because legal issues could be insoluble.
Archer agrees that outsourcing "…can blur who is responsible for safety". He concludes: "Safety relies on a culture…CRM is not merely cockpit resource management, it is complete resource management. If the (corporate) completeness goes, the culture is changed."
Source: Flight International
