Short of a fatal accident, it's an airline chief executive's worst nightmare. Billions of dollars worth of shiny aircraft sit idly on the ground. Terminal buildings are thronged with displaced customers desperate to find a way to get to their destinations. Forward bookings have slumped, yet the bills keep coming in; cash is haemorrhaging out of the company. The media is in a frenzy. Yes, it's a strike.
As carriers attempt to push through their latest restructuring measures, this unpleasant scene may become more commonplace. As we all know, airline operations are labour-intensive and airline managers have little influence over many areas of their costs, from fuel prices to air traffic control fees. Small wonder, then, that it is the employees who are asked to bear the brunt of efforts to improve productivity and boost profits.
Today's battles between management and unions are taking place on two fronts. One group of carriers has yet to complete sufficient restructuring to enable it to compete in the 1990s operating environment. This group includes US Airways and Air France, both of which are hampered by a lack of consensus with their work forces (see features on pages 24 and 42).
The second group of carriers - including British Airways, whose cabin crew began a series of strikes in early July - have already achieved painful productivity improvements, but are trying to become even leaner as competitive pressures mount.
Managers from both groups have a tough task. The restructuring laggards are hampered by decades of traditional working practices and employees lifestyles, and in the case of state-owned carriers there is often a political dimension which favours the unions. The more efficient operators suffer at the bargaining table because they are already profitable. It's very difficult to convince employees that profit margins are insufficient to provide for long-term investment while cushioning against future recessions.
Industrial relations always tend to resemble a game of poker, with both sides taking negotiations down to the wire in the hope that the other side will back down to avoid a strike; after all, nobody really wants that to happen. But if employee groups don't talk tough, they risk lower pay and poorer working conditions; if management doesn't talk tough, it's seen as being a soft touch.
In most airlines, there is an additional complication from rivalries between different employee groups - and even between different factions of the same employee group.
Once a strike begins it is clear that both managers and unions have failed. Managers have failed to communicate their requirements adequately, to judge the mood of the work force, to manage the political intricracies of union structures, and to devise a package which is acceptable - often the distinction between an acceptable deal and anathema is very fine.
Union leaders have also failed - failed to understand the imperative of change to be flexible, to gauge the mood of managers, to come up with sensible counter-proposals. Almost always, there is a failure with the personal relationships among the negotiators from both sides.
Starting a strike is like leaping into an abyss. Attitudes harden immediately. Everyone suddenly has a great deal to prove. Managers must not be seen to bow to the pressure of strike action. Unions have to wrest some concessions to justify going on strike in the first place. The rhetoric increases, as both sides use the media to advance their views. There are dark threats of lock-outs and legal action. Previous business successes are wiped out as cash drains away.
As terrible as a strike is, sometimes airline managers appear to provoke one deliberately. There have been suggestions that BA chief executive Bob Ayling has a not-so-hidden agenda - to weaken, preferably fatally, the carrier's largest but most militant cabin-crew union, Bassa, and to strengthen the hand of the more moderate breakaway union, Cabin Crew 89. On some occasions, not having a strike can even be worse - consider the plight of Stephen Wolf at US Airways, where progress is blighted by a logjam in talks aimed at getting the carrier's costs in line with those of its peers.
Overall, however, a strike is very bad news indeed. Hard-earned customer loyalty disappears overnight and has to be won back. Yet industrial action usually leaves behind an unpleasant taste in the mouths of both management and staff - and the latter bear the responsibility of facing the customer. All airline customers - from premium travellers to budget holiday-makers - are highly demanding. In an industry where service and image are so important, the last thing an airline can afford to have is low morale among its employees.
Source: Airline Business
