Frontier Airlines Outsourcing Summary

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A Denver based company Frontier Airlines decided to outsource more than a third of their employees in order to stay competitive against their rivals in the airline industry. Frontier is hoping this move to outsource would allow them to continue to have immensely low prices and build their company. Dave Siegel the CEO of Frontier Airlines explained that 1,160 employees would be terminated, however, they would be given preference on interviewing and hiring through aviation services companies such as Swissport & Sitel these two companies are the ones they are using for outsourcing their employees. Frontier Airlines based in Denver was the last of its kind that still continued to employ their own employees. Frontier Airlines was hoping that outsourcing…show more content…
Frontier believed that Swissport USA and Sitel are both experts in their field of aviation services since Swissport USA had already provided successful outsourcing experience with other Frontier locations. Frontier thought if they outsourced their employment that they could strategically gain internal control of their cost structure. Frontier Airlines used outsourcing believing that it would allow them to continue to keep their low ultra-fare cost and grow their business. Frontier believed that Swissport USA and Sitel could adequately provide better employee performance through their outsourced services. Frontier using outsourcing methods would effectively drop their operational cost as well as their overhead cost and possible give them a competitive advantage. Outsourcing would allow Frontier to develop new core competencies and skill-sets that could also increase their competitive advantage. Outsourcing gives Frontier flexibility in staffing and manpower management by allowing them to pick and choose who they would like to run their core functions. Outsourcing can increase productivity and efficiency, allowing businesses to be more productive and better prepared for market challenges. Frontier’s decision to outsource will reduce their company’s risk factor since services are provided by other companies they will no longer have to pay for changing technology and buyer proclivity. Outsourcing has some major advantages but it has some disadvantages as well. Frontier’s decision to outsource can be harmful to the company as well because sometimes outsourced company’s employee’s quality of work and turnaround time does not meet company’s standards. Outsourcing have many complaints by many because of the lack of pay, less benefits, and more job task that have to be performed by employees. I believe the biggest

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