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Trans World Airlines Flight Attendance - Case Study Example

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In the paper “Trans World Airlines Flight Attendance” the author provides the case study, which explains the events that took place during a 1986 strike by the Independent Federation of Flight Attendants (IFFA), a federation that worked for Trans World Airlines (TWA)…
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Trans World Airlines Flight Attendance
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Download file to see previous pages The strike happened at a time when the airline business was highly competitive (Wallace, n.d.). All airlines were aiming at making huge profit margins. The industry had become deregulated. This case study is a summary of the issues that characterized the strike. It also gives an opinion on the subject supporting it with similar occurrences and common practice. It also makes recommendations on the best way to solve predicaments similar to the one faced by the IFFA and TWA. The recommendations analyze the most favorable solutions to parties embroiled in similar trade disputes.
Icahn was faced with the need to cut on costs to bolster TWA’s profits. One way of doing this was by reducing labor costs. It was the easiest way out owing to the fact that other management teams apply it when faced with situations that demand to lower operational costs. Icahn required wage concessions and benefit costs amounting to about 300 million U.S. dollars. This would reduce labor costs and expenses before tax by 20% and 8% respectively. The Air Line Pilots Association (ALPA) and the International Association of Machinists and Aerospace Workers (IAM) were agreeable.
The two groups granted Icahn concessions worth $100 million and $50 million respectively, the consideration being profit sharing and worker stock-ownership plans. Icahn was expected to get the remainder from IFFA (Wallace). ALPA and IAM expected the same. If not, he would have to sell the airline because there were some interested parties. IFFA’s leader, Victoria Frankovich, had her reservations about the wage concessions. This was coupled with Icahn’s demands that the flight attendants would be required to put more hours to increase the airline’s productivity and competitiveness. It was intimated that the airline paid a lot more in wages as compared to other airlines with whom it competed; thus justifying these demands. ...Download file to see next pagesRead More
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