United Airlines Outsourcing Case Study

Amazing Essays
Major airline companies such as United Airlines are constantly looking for new ways in which they can reach organizational goals and still maintain cost reduction. The notion of outsourcing allows companies to more effectively achieve these goals by shifting some of the day to day activities to a third party vendor. There are various reasons why an airline might result to outsourcing but regardless of the reason this can cost workers their lively hood as well as possibly compromise the safety of the consumer. This paper will examine why United Airlines should not result to outsourcing as a cost cutting method within the company. It will also further examine the idea of “insourcing” as a proposed solution to United Airlines work force issues. …show more content…
6). It is therefore imperative that through consideration goes into a proposed outsourcing of any kind especially if it involves client contact like in the airline industry. If a customer experiences sub-par service, there is the potential to lose that customer to a competitor which takes revenue away defeating the purpose of the outsourcing. In addition to the customer related jobs United Airlines plans to outsource engineering jobs from its maintenance hub in San Francisco to other parts of the world. However, United employees along with others, question how the move will impact the quality of repair work and aircraft safety. Workers at the base said they were told most of the work would be outsourced to India, with little oversight from an Atlanta firm called TeamSAI Inc. The engineers and specially trained personnel that would be losing their jobs are part of a team along with 3,000 mechanics at the base to ensure that proper designs and repairs of aircraft there. The engineers, mechanics and Speier sited that duties being done by non-airline workers off site could result in mistakes due to communication issues or mediocre quality …show more content…
The benefits of outsourcing in certain instances are not convincing. The success or otherwise of both outsourcing and insourcing are still being measured. An airline needs to not only address financial concerns, but carefully evaluate whether there is a strong business case to outsource. The airline needs to keep in mind whether the outsourcing will negatively impact both at the operational and organizational level, therefore financial considerations should not take precedent over others such as safety and job security. Overby (2007) states that ‘Outsourcing is increasingly pursued by organizations as a “quick fix” cost-cutting maneuver rather than an investment designed to enhance capabilities, expand globally, increase agility and profitability, or bolter competitive advantage (p. 6). The airline must maintain a superior level of service or product or that it exceeds the current service level when it is outsourced. From a consumer point of view, they should not be able to notice any inconsistencies that arise as a result of the

Related Documents

  • Decent Essays

    Notably, focusing on having the best product only reinforces our lack of attention to the front-runners. Therefore, United and American airlines must formulate strategies around transforming Delta and Southwest customers to their own. We learned in Cialdini’s book Influence that is nearly impossible for companies to convert opposing customers who are loyal to a particular brand to our own. Thus, their best chance of converting customers is to target those who are not particularly loyal or who may be on the fence with Delta or Southwest. Offering a special promotion to undecided flyers of the leading airline may convince the prospect that you value their business.…

    • 1884 Words
    • 8 Pages
    Decent Essays
  • Decent Essays

    Crew Fatigue In Aviation

    • 1275 Words
    • 6 Pages

    If they accept the additional flight they will be up later than originally planned, thereby reducing the amount of rest he or she will receive. The second option is to decline the trip, which up until recently was seen as calling out and recorded as a demerit on their employer records. It becomes a battle over profit and safety, where we can no longer allow profit to be victorious. This impacts the pilots that fly to the people and family of those being flown. Even those who live near airports should take note.…

    • 1275 Words
    • 6 Pages
    Decent Essays
  • Decent Essays

    Economic conditions affect Boeing in several ways. Weather conditions along with other economic problems can cause airlines to struggle, which in turn affect Boeing. If no one is purchasing airfare, then it causes a decrease in the purchase of airlines. In order for Boeing to beat competition, they must research the newest technologies and developments of new products. Boeing must have a plan to offer their customers what no other company is offering.…

    • 1104 Words
    • 5 Pages
    Decent Essays
  • Decent Essays

    It is very important for Silvertail Airlines to make amendments so that it will match its new image. However, based on the conversation between Sam and Bobbi, it is unethical to dismiss the existing employers by intentionally making their life harder. They are trying to dismiss employees based on physical appearances and concluding that dismissal would be necessary as it will affect the new images portraited. According to an article shared by Khushboo Sinha “layoffs and retrenchments are not unethical if it is carried out with integrity, rationality and for the well-being of the affected employee(s).” (Khushboo Sinha, 2016) and that is clearly not the case for SIlvertail Airlines. 1.1.2) Damage to Employers’ Brand Image Employers’ brand image…

    • 1155 Words
    • 5 Pages
    Decent Essays
  • Decent Essays

    Who also want to feel like they’re doing business with companies who are not trying to make them pay more than they need to). • The employees/managers (like flight Attends/pilots who have their jobs at stake if customers no longer want to do business with American Airlines because they think the company might be trying to charge them higher prices) • The suppliers (The companies that supply American Airlines with what they need to run their airport stations and airplanes, who will suffer a financial loss if consumers no longer do business with the company). • American Airlines itself is affected by the possible negative views consumers might start having about them. They are also affected by other competitive companies that steal away current/potential customers by portraying themselves as being more customer friendly during the confusion. 3.…

    • 743 Words
    • 3 Pages
    Decent Essays
  • Decent Essays

    Therefore, there would be more of passengers wanting, but unable to book a desired flight, that results in revenue loss for an airline. Beside stochastic delay and revenue, the load factor has direct influence on airline costs, too, in a way that higher load factor generates lower costs per passenger and vice versa. The importance of introducing the route length as a parameter that drives the network strategy is seen in its impact on airline operating costs because unit costs generally fall as route length increases. Therefore, the defined parameters ensure that the chosen network structure attains two goals - profit maximization and targeted level of service, taking into account…

    • 2131 Words
    • 9 Pages
    Decent Essays
  • Decent Essays

    Boeing Case Study

    • 1159 Words
    • 5 Pages

    Boeing is giving up its unique position of superior knowledge on “how to build a commercial aircraft”. Strategic partners today could turn into competitor’s tomorrow. They are risking their ideas and knowledge (know-how) to future possible competitors such as Japan and China. Another risk would be Boeing relying on its tier-1 global strategic partners to develop and build entire sections of the Dreamliner that are based on unproven technology. Any break in the supply chain can cause significant delays in the overall production.…

    • 1159 Words
    • 5 Pages
    Decent Essays
  • Decent Essays

    Risk management is fundamental to all business activities. A good method of managing risk is by looking back at their past mistakes, evaluating them, correcting them, working on them and ensuring they don’t happen again. By doing so, they can avoid and mitigate potential pitfalls. In December 2006, the Boeing airplane was found to be much heavier than it was supposed to be as well as other technical problems which had caused a delay for it to enter service (Laurin, C. 2010). The company should consider possible events that could affect the project’s outcomes and then creating contingency plan.…

    • 862 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    Alternatively, certain limitations set on the discounted cost should be condensed in order to avoid the customers searching for other airline companies offering better rates. Another suggestion related to policy involves a creation of barrier on the dissimilar charges to protect the clients from shifting from the higher price fares to the cost with discounts through the differentiation of services, not only for the conveyance and a little bordering limitation (Crandal, 2011). American Airlines main objective was growth, the ability to expand their operations into further markets will enable the company to increase market share and increase long-term returns for investment. Lastly, the expansion in the market space will also prevent the decline in the profitability of the other competing airlines and prevent competitive pricing among its…

    • 1034 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    Chief Executive Robert Crandall of American Airlines is one of the strongest and most recognizable advocated for regulating again. Crandall (2008) stated, at Wings Club accompanied by other aviation and financial industry professionals, “We have failed to confront the reality that unfettered competition just doesn’t work very well in certain industries” (para. 2). Regulation would benefit the aviation industry by not only bringing but financial stability in an otherwise severally unstable field, but by reducing the bottleneck effect air more trafficked airports. Ticket fares would be more consistent.…

    • 904 Words
    • 4 Pages
    Decent Essays