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Old 01-05-2011 | 12:28 PM
  #56037  
sailingfun
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Originally Posted by gloopy
Honestly I don't give them that much credit. I think they outsource flying for the sake of outsourcing. Their "portfolio concept" is so hard wired into their M.O. that they are drawn to it like moths to a flame. That said, of couse its cheaper in many cases. Cheaper today, at least. But it sets up longer term problems of cost creep and product erosion that harms far more than it helps. And nevermind that you are creating future IndyAir's with staggering amounts of money in the bank and discombobulated operations with 10 levels of redundancy and poor economy of scale. That's tomorrows MBA's problem, not yours. You are focused on your bonus today, which is driven by near term quarterly metrics only. Long term for these guys is a year or two down the road maybe, and that's for those that even try to look that far. Many don't.

They would outsource every aircraft if they could. Heck even dirt cheap outsource providers outsource. For the most part, they are wired to be logo/brand managers who pay focus groups for jingles and slogans and cash in their near daily record-setting compensation packages. While I have nothing but contempt for their lack of "executive talent" and their horrible track record, I realize that it is up to us fix this problem and it won't be cheap or easy. The burden of a group of pilots doing the flying for a particular brand falls on the pilots. Very, ver, very few "managers" will actually willingly run an airline unless forced to by its pilot group.

The cost savings to outsource flying is always carefully monitored by DALPA. The ALPA economic analysis team is considered by even most airline managements to be the best around. This was especially true in the 1113 contract where the company had to put their case for outsourcing before a judge. The reality is that the company numbers and the EF&A numbers have always been very close. There have been differences but never large. The intangible in outsourcing is how much future revenue is lost due to poor performance of the contractor. The actual costs to outsource verses keeping the flying have rarely been in dispute.