Owning expensive equipment or employing people directly is only justified if full use is being made of the resource, there are three levels:
1. Employ the minimum number that can be fully utilised and contract in when extra is needed.
2. Employ the average number used and contract in or out depending on the workload.
3. Employ full coverage and contract out to keep busy during downtime.
Foreign airlines with a single daily flight simply cannot justify maintaining full time support at the destination and often contract out most of the functions whilst retaining their own station manager. Non competing airlines or members of the same alliance often support each other.
Once airlines get a taste of outsourcing it doesn’t take them long to go a step further and contract out everything they can possibly save money on. An airline can be “virtual” and need only employ a few managers directly. Aircraft can be leased, maintenance, ground handling, catering, call centre, reservations, simulator hours etc can all be put out to the lowest bidder.
Problems arise when asked to support a direct competitor, possibly from another alliance. This is where independent ground handlers come in, remember QF refused handling to Tiger Airways when they started domestic operations in Australia.