Back to basics
Over the past 25 years, we have seen a huge wave of outsourcing in air transport. This allowed them to grow faster without incurring the associated fixed costs. As a result, airlines have gradually abandoned a large part of their activities such as catering, aircraft cleaning, ramp handling, check-in counters, and even airport lounges. However, they were not allowed to handle security operations, which were outsourced to airports. To mention only the carriers, we must add the massive use of computer possibilities, which has enabled them to transfer a large part of the operations to passengers. In other words, customers are now asked to do the work that has been done by the companies until now. This strategy has also been very effective because it has allowed operators to continue their growth while significantly reducing their payroll.
I am not sure that this approach, which is largely prompted by the famous “Cost Killers”, is beneficial to air transport. First of all, let’s note that customers, even if they appreciate being able to make their own reservation, issue their ticket and issue their boarding pass, are frustrated not to meet any agent of the company when they have a question to ask. They are then directed to impersonal telephone platforms, which are not able to answer passengers’ questions. It should be noted that almost all the sales and information desks of the airlines at the airport have simply disappeared. And not all air transport users are equipped with the latest technological tools: phones, computers or tablets with which carriers think they can regulate their relations with their customers.
This is how, gradually, air transport lost its magic to become nothing more than a machine for creating turnover. The dematerialization of services, as they say, is certainly not progress for this activity, which is gradually losing its prestige to the point that recruitment has become difficult, especially since the end of Covid.
Airlines are not the only ones to make massive use of subcontracting. Manufacturers have long since abandoned the manufacture of devices to become only assemblers. If we are to believe the statements of the Airbus President, no less than 400 subcontractors contribute to the manufacture of the aircraft. However, each of them can be a bottleneck. Each piece is essential in the assembly of the formidable puzzle that is aircraft construction, and it only takes one of the 400 subcontractors to fail to call into question the entire manufacturing chain. As a result, Airbus is unable to deliver the aircraft at the planned rate. We are talking about 770 aircraft against the 800 planned. Let’s keep in mind that on average an aircraft is worth $100 million.
On Boeing’s side, it’s no better. All the difficulties facing the American manufacturer come from its strategy of massive subcontracting which has escaped the control of both the manufacturer and the American authorities. The price to pay is staggering to the point of even endangering the American giant, which would have a hard time getting by without its military and space branch. So the two major manufacturers decided to take the bull by the horns by buying their major subcontractor Spirit AeroSystems. This company, created in 2004 to take over the activities of Boeing’s Wichita plant, had become an essential partner not only of the American manufacturer, which accounted for 60% of its turnover, but also of Airbus, which entrusted it with part of the fuselage of its planes. In total, Boeing will have to pay $4.7 billion and take over a debt of $3.6 billion and Airbus, which does not want to depend on its direct competitor, is also forced to put its hand in its pocket.
So gradually we see common sense regaining its place, at least among aircraft manufacturers. Let’s hope that carriers will take a step back by replacing or supplementing everything subcontracted and digitalized with a human relationship that customers, always a little stressed at each trip, need so much.
