Nuclear Weapon,
It is a recipe for future deficits. yes it is cheaper initially but what happens when 80% of your stafff decide to become agency. While I was with the nhs I used to get £11-£15/hr on sundays depending on where I worked but the agency was charging the hospital £23/hr
As a rule of thumb you can double your wage bill to establish the actual cost the company for your employment. If you are an employee your employer pays employers national insurance needs to manage your accounts, needs an HR department to subjugate you/manage you (delete as appropriate), etc, etc. As a contractor they have no such responsibilities, you or your agent are responsible for your training, your accounts, your tax...and the biggie is they can shrink or grow the workforce at will with no redundancy to worry about.
An effiicient organisation will see less benefit from contractors, the NHS...
Basically, there are medium and long term benefits too, I would have thought especially so in a non-knowledge based roles such as the flight deck.