Labor Relation in the Aviation Industry - Research Proposal Example

of the of the and number: Labor Relation in the Aviation Industry 0 Introduction 1 Background ofthe research During the time of rapid change and great uncertainty in several industries, aviation industry comes out to be one of the top growing as well as most active sectors in the international or global economy (Steven and Fewster 56-69). To stay ahead, the executives of the airline company are required to think by placing their company in probable scenarios and should rapidly adjust their business models according to the varying market conditions, along with providing their companies with clear direction and guidance. The landscape of industry is shifting continually, therefore the drive of this transformation looks set to speed up in scope and size, calling for fresh generation of aviation leaders (Steven and Fewster 56-69). The aviation industry comprises of various segments such as aerospace manufacturing, government aviation, general aviation, and air transportation. Every segment of aviation industry of US consists of its own practices and labor law. No single organization, labor statute, or agency includes all employees in the aerospace/aviation industry. Any specified law and policies may or may not pertain to an employer or employee of aviation. A vital role is always played by labor relations in the competitive or viable performance of the airlines firms in the aviation industry (Kaps, Hamilton and Bliss 9). 1.2 Purpose of the research In the US, the labor conflict is negatively related with productivity, service quality, and several financial outcomes of airlines. The most significant influences on the performance of airlines are the ordinary issues of the work organization like employee attitude, work rules, the structure and level of costs associated with labor, as well as the impact of these factors on service quality and productivity. The main purpose of this research proposal is to focus on the labor relations in the aviation industry. 1.3 Research question The rationale behind this research proposal is to explore how the labor act has an effect on the aviation industry along with putting emphasis on the labor problems which was noticed in the aviation industry. 1.4 Aims and objectives of research To answer the question of how the labor act has an effect on the aviation industry, following are the aims and objectives of the research proposal: To describe the segments of the aviation industry To focus on the labor problems, which exist in the aviation industry (700) To put emphasis on the key issues such as wages and unions in the airline industry (700) To discuss about the factors which have an effect on the productivity, service quality, and financial outcomes of the airlines industry (500) To focus on the labor relations in the aviation industry (500) 2.0 Literature Review (3450) The airline industry is a very competitive, high technology, and safety-sensitive service industry. Here, the customers, employees, and people are the field of core competence of the organization, not the machines and products. The insinuations are pervasive and fast affecting the culture, strategy, structure, and operational activities of the organization (Fewster 59-71). This section will discuss about the main issues in the aviation industry and how they have an effect on the productivity and service quality, and revenues of the airline industry. Historically, different types of industrial clash and strikes have gained adverse attention due to their visibility as well as direct impact of work strike on revenue and passengers. For example, the two-day walkout/strike by the cabin crew members of British Airways (BA) in the year 1977 is projected to cost BA £120 million, which has badly affected the revenue of the company (International Labor Organization, 32). The disagreement also resulted in the deterioration of the employee morale and work satisfaction. Further, it resulted in the drop of customer satisfaction. These issues have achieved more importance in the latest years. In the business where both international and domestic competition has intensified due to commercialization, liberalization, and deregulation of several airlines, labor presumes an outstanding role in competitive environment. It has been observed that the labor-management relationship in the aviation industry have enhanced in current years. For example, in the US strike activity decreased considerably during the late 1990s. 2.1 Segments of aviation industry Aviation industry consists of four different segments. Each segment has its own labor practices and laws. A concise discussion of every division of the aviation business and labor acts that is relevant to it is follows: Aviation manufacturing: The aviation manufacturing business/industry includes three fields of production i.e. commercial, space, and defense. In terms of occupation, manufacturers of aircraft dwarf the remnants of this division of the industry. In the year 1992, manufacturers of aircraft accounted for approx 64% employment in aviation i.e. out of 2,833,035 workers 1,817,335 of them get employment in aviation (Kaps, Hamilton and Bliss 9). Most of these manufacturers create products for commercial as well as defense use. As shown in table 1, sales from defense ranks 1st, commercial 2nd, and space ranked 3rd in terms of sales volume (Kaps, Hamilton and Bliss 9). Table 1: Sales in the Aviation manufacturing industry in 1983 and 1992 The main companies which are involved in aerospace/aviation manufacturing include Boeing, General Electric, Lockheed Martin, and General Dynamics. Organized labors who are employed in the US by these big industries come under the authority of ‘National Labor Relation Act’ (Kaps, Hamilton and Bliss 10). The air transport sector: From 2000-2004, a sequence of economic and global events led to the employment in the air transport sector (Kaps, Hamilton and Bliss 10). The air transportation sector of US provided 487,000 occupations in 2006. Throughout this duration, the air transportation segment of US endured national recession, terrorist attacks, as well as concerned about pandemics. The consequences of these incidents were overwhelming to the United States commercial airline sector. Though, air travel continues to be one of the well-liked modes of transport in US expanding from 170 million travelers in 1980 to almost 780 million in the year 2007 (Kaps, Hamilton and Bliss 10). Commercial airlines are categorized based on the average revenue creation. Main airlines generate over $1 billion, commuter and regional airlines up to $100 million, and national airlines up to $1 billion in yearly operating revenues (Kaps, Hamilton and Bliss 10). The employees of national and major airlines come under the authority of the ‘Railway Labor Act’. The labor unions of airline are the craft unions, which mean that no sole union symbolizes all of the airline’s staffs, for example, mechanics, flight attendants, and pilots are normally symbolized by separate organizations of labor. The integration of provincial airline industry into the air transport system of United States and its significance inside that system are mounting. As the provincial or regional airlines continue to incorporate with the main airlines and the degree of industry awareness enhances, it is possible that the staffs of the provincials or regional airline will be symbolized by the similar unions that denote staffs employing in the similar crafts for major partners of regional airlines (Kaps, Hamilton and Bliss 10). General aviation: The largely unnoticed element of aviation business is the general aviation, besides the fact that it is also one of the vital sections of aviation industry. It is usually used to signify a type of aviation activities or aircraft. It includes different types of aviation activities such as operators of fixed-base; operations involving light aircraft and helicopters; and executive and business transport (Kaps, Hamilton and Bliss 16). Apart from these, it also includes recreational pilots and air ambulance in times of emergency as well as radio newsperson and police officer for observing traffic. It is a vital key element of aviation industry and also regarded as a contributor to local, state, and national economies. It offers those aviation services that are not provided by the commercial airlines (Kaps, Hamilton and Bliss 16). The sale and production of aircraft, other aviation tools, and avionics make the industry of general aviation a crucial contributor to nation’s economy. In the US, it encourages 1.3 million occupation and over $100 billion of entire economic activity. These occupation ranges from mechanic to pilot to executive chef to dispatcher. Although this segment plays a vital role in the country’s air transport system, then also it remains unseen to the common public (Kaps, Hamilton and Bliss 17). Government aviation: Approximately, more than one lack workers are directly engaged in aviation. The controllers of air traffic and the ‘Federal Aviation Administration inspector’ are the federal workers who are associates of the public unions. The federal employees do not come under the authority of either ‘National Labor Relation Act’ or ‘Railway Labor Act’ (Kaps, Hamilton and Bliss 17). Rather, all the federal staff labor relations are ruled by ‘Civil Service Reform Act’ of 1978. This legislation instituted ‘Federal Labor Relations Authority’ to supervise most of the matters of labor relations of civil service. Moreover, operations personnel and airport managers are engaged by local and state governments (Kaps, Hamilton and Bliss 17). 2.2 Labor problem in the airline industry Scheduled aviation industry’s Federal supervision is so detailed and close that most of the time of management is devoted in satisfying the governmental regulations, directives, and rules. Labor costs are considered as the most costly factor in making air transport. Even the immense commitment and obligation of the aviation industry for the jet aircraft, for the period of five year i.e. from 1958-1962, falls petite of what the aerospace company pays their staffs during the similar period. The lack of the federal power in the labor relation’s field is incompatible with the entire Government rules of each stage of airline industry. Moreover, the few efforts of federal government’s intervention in this field served only to worsen the problem. The airlines burdened with the unwieldy government rule of their economic difficulties, do not enjoy the panorama of expansion of federal rules to the field of labor-relations. The plan of mutual aid or self help installed by various main airlines may obliquely produce this result. If owing to self help and other actions taken by carriers, the negotiating benefits shifts more towards the management, than staff groups possibly may advocate that the governmental law that have enforced close rules of other stages of the airline operation should also accept law of airline or aviation labor relation. The problem for airlines is therefore quite serious, as the options to mutual aid seem quite unpromising and unattractive. Various operational and technical phases of the airline operation are regulated by Federal Aviation Agency. The area of communal bargaining between labor unions and airlines comes within the scope of ‘Railway Labor Act’. During 1960, it became apparent that the force with which position of labor has formerly been emphasized would be exaggerated almost in fraction to the extent of the insurgency in the technology accessible in step-up of airlines from the piston to aircraft which is jet-powered. At the year end, the charge on the operations which are taken by the labor turmoil was the heaviest which the aviation business had ever sustained. The issues governing the labor clashes were: qualification of ‘third crew worker’ on the jet aircraft, and elevated wages for maintaining or flying new aircraft which is jet-powered – a jurisdictional clash between flight engineers and pilots. Tangled with these problems was an unambiguous labor terror that the capacity and speed of jet planes are so immense as compared to even the biggest piston-engine aircrafts that fewer employees and fewer aircraft would be needed by the airlines. In turn, this fear produced charges which the unions were seeking to utilize or exploiting, to offset the technological progress. The dispute between the flight engineers and pilots is the best illustration of the labor problem of airline industries. (Pg 46) 3.0 Methodology (2000 including 4, 5, and 6th section) 3.1 Research objective 3.2 Research design 3.3 Data collection instrument 3.4 Research approach 4.0 Findings 5.0 Discussion 6.0 Limitation of Research 7.0 Conclusion Read More