Airline ‘Outsourcing’

First off, thanks to Tyler for the generous introduction and to both Tyler and Alex for inviting me to guest blog. It’s a great honor, since I read Marginal Revolution each morning with my coffee. Hopefully I’ll have some interesting things to pass along, and I look forward to reader comments (gleff -at-

Moving call centers to India is nothing new. On the whole, Americans seem to have a visceral distaste for it (though they may still opt for it if given the choice). So criticizing outsourcing, an effective rhetorical tool, has spread in its uses. In the battle between Northwest Airlines and its flight attendants, the Wall Street Journal uncritically picked up on the language. This Susan Carey piece (link is to a reprint of the Wall Street Journal article) offers a rather odd definition of outsourcing:

    Those intra-Asia flights are mostly staffed by nearly 700 Asian attendants from bases in Japan, China, South Korea, the Philippines and other countries. They operate under different pay and work rules but have language skills for Asian destinations as well as English. The current union contract allows this limited but longstanding outsourcing.

(Emphasis mine.)

According to Susan Carey (and the PR voice of the Northwest flight attendants union), staffing planes flying within Asia with flight attendants from Asia is outsourcing.

Northwest has significant operations in Asia, and operates a mini-hub at Tokyo’s Narita airport. The airline was formerly known as Northwest Orient Airlines. They maintain local crew bases for their Asian flights for several reasons, only one of which is wages. The airline saves on per diem and hotel costs. But mostly American union members don’t possess the language skills that local residents do.

The practice isn’t unique to Northwest and stretches back decades. Pan Am had a contingent of flight attendants from Kenya 50 years ago. And it works both ways – non-U.S. carriers generally outsource their US government relations function to Americans….


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