Finnair Plus - Finnair shutters engine service unit

From today's news

Finnair outsoures engine service to SR Technics and shutters it's own unit. 280 technical jobs will be axed.

Will the AY engines be serviced in some SR service center abroad or will they establish a unit in Finland? Who knows...

In Finnish:

http://elisa.net/uutiset/talous/?id=95435204

Service will be done abroad from what I understand. AY did first try to increase the volumes in HEL, but no other airlines was interested in such a partnership.

Have any other "quality" airlines, let's say British Airways, Cathay Pacific, Japan Airlines or Lufthansa, outsourced their technical servieces? Or does Finnair want to be identified with a different group of benchmark airlines?

I've seen both successful and not so successful outsourcing projects. But it seems that usually people realize the full value of in-house expertize and loyal employees, whose top priority is not how many hours they can invoice, only after they have lost them. Let's hope that the benefits outweigh those things in this case. But it seems that Finnair is being run by devout followers of the Church of Outsourcing.

Unsurprisingly Finnair technical staff immediately staged a two day walkout. I guess they have very little reason being loyal employees any more. It might cause some other troubles as well until the outsourcing has been finished.

Have any other "quality" airlines, let's say British Airways, Cathay Pacific, Japan Airlines or Lufthansa, outsourced their technical servieces? Or does Finnair want to be identified with a different group of benchmark airlines?

Cathay Pacific outsources engine maintenance to HAECO and Lufthansa Technic.

Japan Airlines outsources some engine maintenance.

I'm less familiar with BA and LH.

But it seems that usually people realize the full value of in-house expertize and loyal employees, whose top priority is not how many hours they can invoice, only after they have lost them.


The labor portion of an engine overhaul is very limited. Most of the money for the overhaul provider (where, as here, the overhaul provider is not the engine OEM), comes from handling fees for various material installed on the engine and for repairs (which are not billed hourly). Every engine overhaul contract I've ever negotiated includes a turnaround time guarantee, which would disincentivize a supplier from going slow.

This may also be a power-by-the-hour deal, whereby AY pays a flat rate for maintenance per each hour that the engine operates. That rate typically includes labor and handling charges. It typically would not include material where the supplier is not the OEM (the supplier cannot control the cost of material, which is typically just a passthrough, plus the handling fee).