Airline Maintenance Outsourcing Stabilizes

CHARLOTTE, N.C. -- Maintenance outsourcing by U.S. airlines has grown rapidly since 2000, contributing to a sharp decline in maintenance employees at some carriers, but the trend has leveled off in the past year.

Fully 71% of the airplane work at Northwest(NWA Quote) was contracted out in 2007, the biggest share among U.S. carriers, according to the U.S. Transportation Department's Bureau of Transportation Statistics, which recently released figures for last year.

The figure has increased from about 24% in 2000 and around 67% in 2006. At Northwest, mechanics are represented by the Aircraft Mechanics Fraternal Association, which hasn't strongly resisted outsourcing. Plus, AMFA staged a disastrous 2005 strike that led most of its members to lose their jobs.

For all airlines, the percentage of outsourced maintenance work in 2007 increased to about 38%, up from roughly 28% in 2000 and 37% in 2006. Largely as a result, U.S. scheduled airlines employed 32% fewer maintenance workers in 2007 than in 2000, according to BTS figures.

Between 2000 and 2007, the number of maintenance employees fell by 42.6% at the seven large network carriers, while increasing by 2.1% at six low-cost carriers. Northwest had the largest reduction in maintenance workers during the period.

Between 2006 and the next year, the biggest increase in outsourced maintenance for a single airline occurred at US Airways(LCC Quote), which sent out 55% of its maintenance work, up from 40% 2006. The increase resulted from spending $249 million on scheduled engine repair, up from $91 million a year earlier.

Maintenance Outsourcing in 2007
Airline	spending	% maintenance outsourced in 2007	% outsourced in 2000
Northwest	$906 million	71%	23.8%
Atlantic Southeast	$161 million	68.6%	NA
America West	$264 million	67%	73.1%
ExpressJet	$266 million	66.4%	56.9%
Southwest	$890 million	60.5%	60%
US Airways	$691million	55%	29.6%
Alaska	$248 million	53.8%	76.2%
Skywest	$185 million	51.1%	NA
Continental	$1 billion	49.2%	46.6%
AirTran	$180 million	48.4%	39.2%
Comair	$174 million	47.4 %	NA
JetBlue	$196 million	45.7%	6.8%
United	$1.94 billion	45.7%	16.3%
Mesa	$238 million	36.7%	NA
Delta	$1.17 billion	31.7%	18.8%
American	$1.96 billion	23.4%	23.4%
American Eagle	$265 million	20.8%	36.4%
Frontier	$99 million	20.5%	NA
TOTAL	$37.6 billion	37.6%	27.8%
Source: Bureau of Transportation Statistics (Total includes cargo and charter airlines )