The Deregulation Of The Airline Industry - 1037 Words

In 1936 congress put all commercial airlines under the Railway Labor Act. Since then, there was a period of 42 years under economic regulation where the government oversaw labor relations. Since deregulation, the goals of collective bargaining have not changed much, nor have the objectives of management and labor unions. (Wensveen, 2011, p. 422) The deregulation of the airline industry may have been a win for passengers, but most likely not a win for labor groups. Prior to deregulation the airline industry was highly unionized, enjoying excellent wages, benefits and pensions. Since deregulation there has been a drop in wages and most carriers have eliminated pensions. Also before deregulation, unions would bargain with management at each air carrier and once a contract was reached, the next carrier would begin bargaining from the other contract, to enhance theirs. This continued bargaining from carrier to carrier helped to build better work rules and compensation. Labor relations bef ore deregulation were generally good, with the CAB setting fares it guaranteed profits around 12 percent, the increased labor costs were passed onto the passengers. This allowed the unions and management to maintain amicable relations while providing a productive work environment. After deregulation, the work of the labor unions began to crash down. New low cost carriers like Southwest, started taking large market shares. The labor unions had less bargaining power. To maintain profitability,Show MoreRelatedDeregulation of the Airline Industry1754 Words   |  8 PagesDeregulation of the Airline Industry The airline industry has been subject of intense price competition since it was deregulated, and the result has been a number of new carriers which specialize in regional service and no-frills operations. These carriers typically purchase older aircraft and often operate outside the industry-wide computerized reservations system. 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