First, compare fares and product offerings of low-cost-carrier and a comprehensive network carrier from either the U.S. or Europe. Select your choice of airlines from each category and a market that both serve. From each carrier’s website, find the fl

Running Head: Collective Bargaining Agreement 0

Collective Bargaining Agreement

Embry-Riddle Aeronautical University

BSAB – 415 – Airline Management

08 JAN 2016

Introduction to Collective Bargaining

Collective bargaining is position and negotiation between corporate employees and labor union constitute a specialized area in the field of general negotiation, but the underlying legal and relationship aspects make them distinct. Collective bargaining is governed by External laws. According to Charles Carver, “Gain insight into new approaches to collective bargaining negotiation. It is needed to know the factor that can influence the outcome of labor negotiation” (Chamberlain & Kuhn, 1965).

Airline negotiation take consideration on amount of time particularly in relation to contract negotiated under the national labor contract act. Further, the duration of negotiation increase over time. Industry growth rates may be increased by longer negotiation, but financial condition of career does not correlate with duration of negotiation. Much of the variance in duration of negotiation can be attributing to the specific identity of airline and unions involve in bargaining. Time require to negotiate airline labor contracts is not determined by economic conditions (Hendricks, Feuille, & Szerszen, 2011).

Southwest Airlines Employees and Collective Bargaining

Southwest Airlines actively participates in negotiation with collective bargaining agents on all levels. Currently company has made twelve contracts with twelve unions working within the organization. Transport Workers Union, Southwest Airlines Pilots Association, Transport Workers Union and Aircraft Mechanics Fraternal Association are some major unions working within the company. The company has some old contracts with these unions which are negotiated again on 5/1/2015. Company renegotiated these contracts as both labor unions and company’s management were suffering from following problems (Swamedia.com, 2016).

• Contracts were taking longer time to negotiate.

• Inter union representation and competition challenges increase uncertainty and made negotiation and problem solving more negotiated.

• File rejection and rank of tentative contracts were increasing.

The major problems to be discussed in negotiation meetings are given below.

1. Labor Cost:

It’s a biggest issue in airline industry. Its operation cost increase when labor expenses increase. It’s most important and focal point in industry when reducing cost. So this is big issues when making a negotiation with labor

Solution:

For that purpose, the airline industry needs to collaborate with employees. Manage best way by doing collaboration with labor and mutual collaboration with labor and management is most important. Set a cost which should be suitable for company as well as employees (Johnson, 2015).

1. Wages criteria and bargaining structure:

Another issue for Airline industry in making a collaborative agreement is wages criteria and bargaining structure. Wages decisions are more important but these are delayed mostly, they have poorly matched to business conditions. Delayed negotiation is very difficult if economic conditions changed. Organizations need to do quick decisions about labor wages and try to reduce labor cost.

Negotiation is difficult in any industry Characterized by boom and bust cycles. They are more difficult if information’s drag from boom to lower (Beaumont, 2015).

Solution

Solution of this problem is that employee and management should have a collaboration and coordination with each other than they can do best agreement.

1. Pilot seniority and scope clause issue:

The emerging business model suggest that in short run job opportunities will continue to shift from major hub and spoke carriers to lower cost point to point Careers and feeding airline. Senior pilot are experienced and making contracts with them is difficult. So this is big issue for industry to make collaborative agreement with them. This is losing-lose situation for all companies especially, for safety and security of customers (Johnson, 2015).

Solution

Some creative solutions have been negotiated to address this problem such as the Jest for jobs agreement at US Airways and similar family wide adjustment and transfer plans.

Industry need to make best plans to solve this issue and use Experienced and skilled staff in appropriate way.

Conclusion

In airline industry, it is needed to make a contract by negotiating in best way. Individual companies and unions should be encouraged to negotiate the rows protocols and timetables for negotiation, mediation. Release and final step for resolving disputes should an agreement not be reached within this time frame. Such protocols should be required part of an overall recovery compact and business plan. Changings in business situation are taking a longer time to make a collaborative agreement with labor.

References:

1. Beaumont, P. B. (2015). Blending Old and New: How Low-Cost and Legacy Carriers Are Reshaping the Airline Industry. Members-only Library.

1. Chamberlain, N. W., & Kuhn, J. W. (1965). Collective bargaining: New York: McGraw-Hill [1965].

1. Hendricks, W., Feuille, P., & Szerszen, C. (2011). Regulation, deregulation, and collective bargaining in airlines. Industrial & Labor Relations Review, 34(1), 67-81.

1. Johnson, N. B. (2015). Airlines: can collective bargaining weather the storm? Collective bargaining in the private sector, 16, 34.

1. Swamedia.com,. (2016). Labor Relations - Labor Relations - Southwest Airlines Newsroom. Retrieved from http://swamedia.com/channels/labor-relations/pages/labor-relations#chart