You will prepare and submit a term paper on Saving in Aircraft Maintenance Cost. Your paper should be a minimum of 5750 words in length. However, the solution is not feasible for every airline company. The business vision and mission of the company, as well as the nature of the aircraft, determines the strategy that the company will acquire for maintenance of the aircraft.
Air transport is one of the most rapidly growing industry sectors. This aggressive growth is increasing the segmentation of the market in terms of prices. Insourcing has turned out to be a very potent business strategy in aviation. When outsourcing is not feasible, insourcing is the alternative organizations readily choose (Červinka, Štverková, & Humlová, 2012). Insourcing is not only a viable business manoeuvre for the low-cost carriers, but both the low-cost model and the traditional carrier also benefit from this approach.
However, this does not mean that in-sourcing has an absolute edge over outsourcing. Both strategies have their pros and cons. Today there is fierce competition in every industry and air industry is no exception. This contest has forced the aviation sector to seek out methods that reduce its business costs. The easiest solution is to outsource its non-strategic business functions. The result is that the company gets free from distractions and becomes more focused on managing their core competencies. A standard function that the airlines ready outsource is maintenance. For instance, by 1989, United States carriers had outsourced 25% of their maintenance functions (Rutner & Brown, 1999). In terms of monetary value, it reaches around $218 million (Rutner & Brown, 1999). Aviation industries readily outsource maintenance because it is a non-core activity. The non-core functions are those activities that provide critical support to the proper running of the business, but these are not the unique ingredient of the product. Maintenance is necessary, but it should not become a unique product ingredient. Every airline needs to maintain aircraft as it is imperative for operating safer flights. .