What's Happening to Commercial Aviation?

The aviation industry is facing tremendous structural changes that will forever alter the prospects of those who participate in the maintenance of aircraft. The big question is, are you aware of these changes and have you figured out what to do about them?

We can complain all day long that airlines aren't going to employ very many mechanics anymore and that more work is getting outsourced, but so what? That is happening and that is reality. We can either deal with it or do what many maintenance people have done, and that is leave aviation and seek an alternate career path. As sad as it is to see great jobs disappearing, the trends are clear. Airlines have figured out that employing mechanics to do all maintenance in-house is simply not cost effective. The traveling public has been trained, since deregulation in 1978, to expect airfare prices so low that they don't even keep up with inflation; even the cost of airplanes, fuel, maintenance, etc. has climbed with inflation.

But the price that airlines want to pay is less, much less. John Goglia, former National Transportation Safety Board member and currently a safety consultant, estimates that most airlines that did their own maintenance will soon employ about 10 percent of the certificated mechanics that they used to. This is a direct result of the airlines outsourcing their maintenance to low-cost providers.

Goglia also noted that he has seen some extraordinarily low maintenance labor rates--as low as 10 percent of what airlines pay in the U.S.--in places like China. One cargo operator told me that they save 50 percent on maintenance costs by sending their airplanes to Peru for heavy maintenance. That savings includes transportation costs.

Another airline maintenance person told me that his company, which offers line maintenance services at bases all over the world, is not competitive (in some locations) at a $40 per hour labor rate. An airline that likes this company's service wanted it to provide line maintenance at its Miami, Florida base, but the airline wanted to pay just $30 an hour. That apparently is the going rate in the Miami area.

Well, I can hear you saying, "that's terrible!" Of course it's terrible. It's also scary. How much are the Miami mechanics getting paid out of that $30? Do they get any training? Do they have health insurance? Can their employer afford to buy the proper tools and keep them calibrated? Can the company afford to promote mechanics, and give them raises?

The answers to the above questions are obvious. A harder question to answer is, what about quality? Can these low-cost maintenance companies possibly deliver a quality product? I doubt it.

But that's where the maintenance managers and supervisors and mechanics who are thinking of leaving this industry might be able to help.

We know that airlines are going to continue pressuring maintenance providers to work as cheaply as possible. Until airlines start to enjoy some pricing power, they are going to force maintenance costs down to the bone.

There are two ways that maintenance people can deal with this situation: they can either leave the industry or they can figure out how to help the airlines find quality maintenance.

If they leave the industry, then prices will automatically climb someday, because the airlines will finally realize that quality work costs money. With fewer highly qualified people in the maintenance business, prices will have to rise to retain and attract personnel.

If they don't leave the industry, then hopefully they will explore opportunities to work for these maintenance providers. The maintenance of aircraft must be done. Airlines are already flying more than they were before the 2001 recession, and they are projected to continue growing flight hours even more. No airline wants to have an accident because of a maintenance problem, and the companies that provide maintenance to the airlines will eventually realize that there is a lot of experienced qualified talent out there. The better companies will try to employ that talent to give their companies an edge on the competition.

These kinds of economic convolutions can be incredibly painful, and I do feel sad for the many fine people who have left the aviation maintenance industry. The cycle will eventually shift in the other direction, and those who have stuck it out will be in high demand. There's no telling how long this will take, but just ignoring the obvious trends is not going to make them go away.

A better option is to observe the trends and figure out how to take advantage of them. For some people, that will mean finding a job at a good, forward-looking company whose leaders know how to take advantage of the trends. For others, it may mean starting their own businesses, like the many independent small turbine hospital shops that have opened in recent years. And, sadly, for many, it will mean saying goodbye to aviation. That's a trend that none of us can do anything to change.