Airlines turn to Outsourcing in order to keep the spending stable
If until recent times, the personnel in the airport, working at the check- in desk for a certain airline was employed directly by that particular airline, the next time you hand your plane ticked and your booking data, you may be welcomed by a customer representative that was hired via an outsourcing process.
Despite the fact that they wear the same uniform representing the airline, the staff may not be employed directly by the company. As per the latest trends in the business, the entire staff can be outsourced ( check-in personnel, telephone customer service, stewardess and stewards).
“We outsource everything that we can outsource,” says Warwick Brady, chief operations officer at easyJet. “As long as we can manage it and control it, it gets outsourced.”- the strategy is a clear attempt to drive down costs and airlines are reviewing every part of what they do to see if someone else can do it more cheaply.
Typically, budget airlines such as easyJet and Ryanair are the biggest outsourcers as they look to keep a tight lid on their costs.
Only staff in easyJet’s core functions, such as its crew and its pilots, are on the payroll, leaving services such as passenger helplines and crew rosters to specialists in Montreal and Krakow respectively.
However, Outsourcing is not a new concept for the airline industry; it has been implemented in varying degrees by most carriers. Historically, airlines have outsourced a variety of functions ranging from check in, to cargo handling, to information technology and even to flying itself. In addition to enabling management to focus on the core business, outsourcing has provided the following benefits to carriers:
- Ability to leverage a service provider’s scale, expertise and systems
- Lower labor and capital costs
- Higher quality and more stable processes
With a proven track record and the promise of these benefits, outsourcing would appear to be a potent tool for confronting the cost pressures currently plaguing the airline industry.