The manufacturing sector of civil aviation related goods contributes as a leading export in United States (FAA). The U.S. exports Civil/Military Aircraft, engines, equipment and parts throughout the globe. Looking specifically at China alone, according to U.S. Department of Commerce (2012), the U.S. Exported $6.33 trillion in Civilian Aircraft, Parts and Engines in 2002 and 2003. Since 2004-2011 the U.S. has exported $32.2 trillion of the same products. For the United States, when emerging countries like China, enter the market, this expands there market base leading to increases in production ultimately increases RGDP. But as China develops into an industrialized country, they will eventually catch up with the United States, producing parts for cheaper with reduced labor costs.
A reduced Labor cost is another threat that the Civil Aviation Industry in the United States Faces today. Airlines have begun to outsource their Maintenance to third party labor forces in countries like Singapore, Mexico and China. According to Douglas (2012), “American Airlines will outsource its aircraft maintenance to China.” This is the result of the airlines competing with the price of maintenance in the U.S. and having to cut costs during the recession.
As a senior on his way to Graduate with a major in Aviation Management, It is obvious that these issues are going to have an adverse effect on the Aviation Industry. As countries with lower Labor costs are becoming more popular within the U.S., I see the following solutions. First I would recommend FAA interference in approval for maintenance outside the U.S on U.S. Aircraft on the premise that the consumer’s safety is at danger.
Douglas (2012) said the following in his article
Foreign maintenance allows companies to forgo employee background checks, no drug testing, aircraft mechanics do not have to be licensed only supervisors are required to be licensed mechanics, and FAA inspectors are forbidden from making spot checks and surprise inspections a common occurrence at U.S. overhaul bases. In fact, at major U.S. maintenance facilities FAA inspectors are present on a daily basis. (Par 8)If FAA inspectors cannot access these facilities then regulation needs to adapt to fit the safety needs of airline passengers. As for a solution for companies catching up and developing parts themselves, I suggest that it is time to develop positive relations with these emerging foreign industries. In this global market it becomes hard for government to step in and regulate industries beyond their borders, but collaborations and financing in R&D could stimulate growth in our industry, in turn providing/supporting more jobs for U.S. Aviation Industry.
In the future I see these factors affecting me in the job market when it comes to who will be hiring and what they will be looking for. I believe that being aware of current issues in the Industry, having an opinion on them as well as possible solutions will come as an advantage while searching for a job. I also think that finding a good job in this industry may require more education and possibly a second language. Wherever this industry is heading I am committed to the future of it as well as my own.
Adam V. Patruno
Undergraduate Aviation Management 13’
Sources:
Douglas, J. (2012) American Airlines To Outsource Aircraft Maintenance To China Retrieved from http://avstop.com/september_2012/american_airlines tooutsource _aircraft_maintenance_to_china.htm
Federal Aviation Administration (2012) FAA Economic Impact Report 2011 Retrieved from: www.faa.gov/air.../FAA_Economic_Impact_Rpt_2011.pdf
United States Department of Commerce. (2012), U.S. Exports to China by 5- digit End-Use Code 2002-2011. Retrieved from
http://www.census.gov/foreign-trade/statistics/product/enduse/exports/c 5700.html#questions
United States Department of Commerce (2013, January) U.S. Economy at a Glance: Perspective from the BEA Accounts Retrieved from:http://www.bea.gov/new sreleases/glance.htm
United States Department of Labor (2013 January) Current Employment Statistics- CES (National) Retrieved from: http://www.bls.gov/ces/tables.htm
If aircraft manufacturing companies and the FAA know that foreign maintenance can impact the safety of the operation, how does the company get approval from the FAA to do so?
ReplyDelete@Golden Eagle, "FAA repsonses to airline's outsourcing maintenance". I found an article that states the FAA fined San Antonio Aerospace, a maintenance subsidiary based in Singapore, $1.025 Million for violating safety regulations in 2007-08. The fines were primarily for not complying with background checks as well as drug screenings. You can read more from the article at the URL provided below (McGee 2013).
Deletehttp://news.consumerreports.org/money/2011/01/faa-fines-outsourcing-airline-maintenance-drug-testing-sanantonio-aerospace-pemco-world-air-service.html
I agree with your suggestion on building stronger relations with foreign industries. However, how can this help the United States increase their rate of open and secured jobs within the states?
ReplyDelete@Ehab, Companies who base their operations in United States provide jobs for people within the United States. I believe that developing foreign relations will help continue the sale of domestic components to foreign countries.If companies continue to hold licenses on products which comply with regulation I believe this will help sustain jobs in the U.S.
DeleteI have never looked into how much money the United States makes off of exports from the aviation industry to other countries. That number is incredibly impressive! I am kind of surprised that China still relies on our aviation products and has not decided to produce all of their own supplies. I am sure, like you said, that they will begin to do so in the near future if they have not already done so. I agree with you in saying that the cheaper labor costs may become an obstacle for the U.S. and cause demand of expensive American parts to decrease if China can make comparable products for a cheaper price. I also never knew that U.S. airlines were having maintenance done in other countries. I am actually really surprised by this fact, especially since the FAA has knowledge that there are no background checks on personnel and that they are not required to have certificates. I am interested to see if some sort of change occurs, whether it be the FAA not allowing the airlines to continue doing this or the FAA requiring these facilities to change slightly.
ReplyDeleteKyle, I couldn't find anything in the regs directly relating to companies in the U.S. outsourcing maintenance to foreign countries. In some of the sources connected attached to my original post I found that there are regulation compliance's products have to meet in order to be imported into the United States. Also companies have to perform background checks in order to employ contractors, it doesn't specify just within the United States, so i assume that means they should be preforming them on contracted jobs outside the U.S.. In my response to Eagles post is an Article where the FAA fined a company for not following this regulation on employees in Singapore, you should read the article and see if that answers any of your questions on where you think these regulations could be heading for change.
DeleteOkay, thanks!
DeleteAdam:
ReplyDeleteGood write up and good sources. I pose the following questions.
What advantage to Chinese airlines have over U.S. Airlines when competing for global markets?
Third party maintenance must be done in accordance with a company’s Op Specs. The maintenance is done at U.S. Certificated foreign repair stations. They pay a certification fee in lieu of taxes. Yes, staff and supervisors are certificated A&Ps, the folks turning wrench are not. That is how they remain “low cost.” The FAA does have field offices in foreign countries that oversee the work.
Dr. Tartalone