Offshoring of Airline Maintenance: Implications for Domestic Jobs and Aviation Safety [December 21, 2012] [open pdf - 568KB]
"The passenger airline industry in the United States has gone through significant changes since deregulation in 1978. In domestic operations, airlines now have almost total freedom to determine which markets to serve and what airfares to charge. Competitive forces, as well as higher fuel prices and changing travel patterns, have placed the industry under financial pressure, as evidenced by numerous mergers and bankruptcies. To stay competitive and profitable, many airlines have joined alliances to expand their global reach and achieve economies of scale. At the same time, price competition has forced airlines to contain costs. One of the practices aimed at keeping costs competitive is the outsourcing of aircraft maintenance, repair, and overhaul (MRO), either domestically or to foreign countries. The practice of outsourcing aircraft maintenance is not restricted to U.S. passenger airlines. Many foreign airlines and cargo carriers also send maintenance work to outside service providers. This report focuses on U.S. passenger airlines because their outsourcing of maintenance, especially to foreign countries such as China and El Salvador, has generated specific concern among Members of Congress. This report analyzes trends in MRO outsourcing and explains the major factors contributing to them. It then considers safety consequences, employment effects, and regulatory implications of increased foreign maintenance of U.S. passenger aircraft."
CRS Report for Congress, R42876