Low-cost carriers take to outsourcing to stay fit

EconomicTimes.com
To mitigate the effect of increasing costs, low-cost airlines are increasingly looking at outsourcing to lower their operational expenses. While Air Deccan is in talks with an Indian company to outsource its maintenance, repair and overhaul (MRO) needs, GoAir recently announced its joint venture with Singapore Airline Engineering Company to provide MRO services in the country. Some others are also expected to follow suit. Outsourcing fits well in their business model because of the overcapacity in the low-cost airline segment. Indian low-cost carriers (LCCs) are therefore high on outsourcing following a global trend to this effect. “For LCC outsourcing is a good option as it helps in cutting capital costs and increasing efficiency. Besides, by outsourcing they are partnering with the best in industry,” says Kapil Kaul, CEO, Indian Subcontinent and Middle East, Centre for Asia Pacific Aviation (CAPA). Most LCCs are outsourcing their ground handling and heavy maintenance to an extent. more...