Up in the Air: How Airlines Can Improve Performance by Engaging Their Employees
Product Description
“And you thought the passengers were mad. Airline employees are fed up, too-with pay cuts, increased workloads and management’s miserly ways, which leave workers to explain to often-enraged passengers why flying has become such a miserable experience.”–The New York Times, December 22, 2007
When both an industry’s workers and its customers report high and rising frustration with the way they are being treated, something is fundamentally wrong. In response to these conditions, many of the world’s airlines have made ever-deeper cuts in services and their workforces. Is it too much to expect airlines, or any other enterprise, to provide a fair return to investors, high-quality reliable service to their customers, and good jobs for their employees? Measured against these three expectations, the airline industry is failing. In the first five years of the twenty-first century alone, U.S. airlines lost a total of $30 billion while shedding 100,000 jobs, forcing the remaining workers to give up over $15 billion in wages and benefits. Combined with plummeting employee morale, shortages of air traffic controllers, and increased congestion and flight delays, a total collapse of the industry may be coming.
Is this state of affairs inevitable? Or is it possible to design a more sustainable, less volatile industry that better balances the objectives of customers, investors, employees, and the wider society? Does deregulation imply total abrogation of government’s responsibility to oversee an industry showing the clear signs of deterioration and increasing risk of a pending crisis?
Greg J. Bamber, Jody Hoffer Gittell, Thomas A. Kochan, and Andrew von Nordenflycht explore such questions in a well-informed and engaging way, using a mix of quantitative evidence and qualitative studies of airlines from North America, Asia, Australia, and Europe. Up in the Air provides clear and realistic strategies for achieving a better, more equitable balance among the interests of customers, employees, and shareholders. Specifically, the authors recommend that firms learn from the innovations of companies like Southwest and Continental Airlines in order to build a positive workplace culture that fosters coordination and commitment to high-quality service, labor relations policies that avoid long drawn-out conflicts in negotiating new agreements, and business strategies that can sustain investor, employee, and customer support through the ups and downs of business cycles.
Category: Trip Deals
This book examines an important but perhaps overlooked aspect of modern global airline industry operations summed up on page three in the form of a question: do low fares inevitably mean low quality jobs? In examining this issue, the authors focus the bulk of their attention on the United States but also devote chapters to other countries and strategic and sector-specific issues including cost, productivity, service quality, industry structure, barriers to entry and exit, and threats and opportunities. The book’s conclusion makes recommendations that go beyond being strategic management advice but rather have implications for multiple industry stakeholders. These suggestions flow easily from the preceding comparative and historical analyses.
In the book’s first chapter, the authors succinctly describe two theoretical frameworks that are used to guide subsequent analysis. First, they propose an historical distinction as being between “before” versus “after” sector deregulation. In this context, the term deregulation refers to public policy which allows for unrestrained commercial competition, a dismantling of monopolistic industry structures, reduced government ownership and increased emphasis on market-determined outcomes. In the early 1970s, the United States was the first nation to embrace airline industry deregulation. Beginning in the 1980s with the United Kingdom, countries from other continents have followed the American lead, although with some differences that are well explained on page 29. Individual airlines may be thought of as having different characteristics and competitive strategies based on whether they are legacies, existing before, or new entrants, emerging after deregulation. Second, in the following section of Chapter One, the authors present a framework for understanding management orientation vis-à-vis labor relations which establishes employer interaction with unions and employees as primary dimensions for understanding firm difference. Airline stakeholder outcomes may be viewed as caused by the two classes of consideration, namely historical positioning and employment relations orientation. I found the book’s introduction especially well structured. I have recently recommended the chapter to students who are nearing completion of a thesis but unsure about how to lead in to a complex issue in an interesting way as a prelude to addressing theoretical and conceptual issues (some scholars suggest that the introduction of a thesis should be written following completion of other chapters).
In its middle chapters, the book provides sophisticated and farsighted commentary about the competitive strategies of airlines throughout the world and the changing regulatory and operational environments in which each country’s industry has functioned. The work is replete with extensive historical and technical detail, good analysis, and insightful conclusions. Remarkably, the read remains interesting and accessible. Its narrative moves back and forth between discussion of strategic and competitive issues to consideration of employee morale and labor relations. The authors illustrate their points with statistics and findings from ethnographic and qualitative methods and anecdotes. They have an intuitive grasp of when to change style and direction in presenting material without compromising the logic or structure of the narrative. I remained impressed with how effectively the book’s theoretical frameworks were able to accommodate data and observations. Indeed, I became convinced that the legacy/new entrant distinction is indispensible for understanding the nature of competitive strategy within the airline industry and that the employment relations orientation of individual firms are well reconciled using the model presented on page 12. From a scholarly perspective this point is instructive. It reminded me that it is possible to use deceptively simple analytic tools to make sense of complexity and ambiguity. A good example of this appears on page 95 where relations between firms from different countries are placed on the employment relations grid. The discussion here focuses on Southwest Airlines which is viewed as being able to achieve success whilst pursuing a union/management partnership orientation and an employee commitment orientation.
I like the book’s clarity. Each chapter starts with a straightforward overview of where the reader is headed. The sentences are short, direct and devoid of adjectives or adverbs. Paragraphs are well ordered and integrated. In presenting airline-specific material, the authors convey a strong sense of national culture and priorities. Such context does not disrupt the flow of the narrative or shift attention from the principal object of analysis, airline industry strategy and its labor relations consequences. On the contrary, I think the authors strike entirely the right balance between consideration of necessary background and discussion of focal issues. This feature of the book, namely the way it manages critical and less relevant content, has widespread instructional value, particularly for doctoral students and early-career scholars.
The book is hard to characterize, a point which I don’t intend to be a criticism. I think the work would have broad appeal to those interested in strategic management, labor relations, globalization and/or economic history. The authors made me consider how the experience of airlines would be helpful for understanding other industries such as telecommunications, the electronic and print media and, the freight and shipping transport sectors. In this sense, the book convincingly builds generic arguments about the new economy and globalization. Part of its contribution is to offer insights into the modern functioning of capitalist market economies in circumstances where the object of analysis becomes almost inconsequential. I found the book enjoyable. Upon reflection, I think this is due to the quality and sophistication of its scholarship and not because I am especially fascinated by airline industry strategy and the sector’s labor relations. If my hypothesis is correct, Up in the Air can fairly be regarded as an exceptional work.
Anthony M Gould PhD
Professor of Labor Relations
Laval University
Quebec City
CANADA
This Review is published in Relations Industrielles /Industrial Relations Volumne 64(4) 2009.
Rating: 5 / 5
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Extract from The Log, British Air Line Pilot’s Association, April/May, 2009
Our pick of the best aviation-inspired books this month Up in the Air: How Airlines can Improve Performance by Engaging their Employees. By Greg J Bamber, Thomas A Kochan, Jody Hoffer Gittell, Andrew von Nordenflycht, Cornell University Press, New York, ISBN 987-0-8014-4747-1 This refreshingly readable and persuasive book challenges the emerging orthodoxy that low-cost must mean low staff morale and low customer satisfaction. Drawing on examples from across the world, including `legacy’ airlines such as British Airways and new entrants such as Ryanair and easyJet, the authors analyse the competitive and employment-relations strategies that airlines have adopted. Outcomes for customers, employees, and other stakeholders are analysed. The authors categorise employment-relations strategies as either controlling employee behaviour, or aiming to foster commitment. In terms of relationships with Unions, airlines can seek to avoid or oppose Unions, accommodate them by accepting their legitimacy or partner with Unions seeking to establish a deeper relationship than contractually required. The authors suggest that Ryanair’s employment strategy is to focus on low costs via anti-unionism and employee control. British Airways appears to accommodate Unions and practises more of a control approach. By contrast, Southwest adopts much more of a partnership and commitment approach. One paradox is that the rhetoric of some airlines has emphasised the importance of fostering employee commitment and offering good customer service, while simultaneously seeking to reduce employees’ economic rewards or other benefits. Such airlines are not reaping the potential advantages of developing partner relationships with their workforce and Unions. This highlights, according to the book, that the trinity of sustained profitability for investors, good customer service and positive relations with employees can be achieved with positive industrial-relations strategies. The authors suggest that the genuine partnerships should feature: joint commitment to the success of the enterprise; efforts to build trust; employment security in exchange for flexibility; quality training programmes; information sharing and joint problem solving with managers and employees.
To maintain a more sustainable airline industry, with more economic security, there is a need for bold and open-minded leadership. Regrettably the book could easily be overlooked in the face of gathering economic
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clouds. But, as Southwest founder Herb Kelleher observed, `nothing kills your culture like layoffs’, so how the economic downturn is navigated will be crucial to how companies emerge from the downturn. Jim McAuslan General Secretary of the British Airline Pilots’ Association (BALPA), London “BALPA produces a bi-monthly publication; our flagship journal, The Log, which deals with industry news, interviews, reviews and general interest articles. “The Log is free for BALPA members; non-members can subscribe at a cost of £26.50 UK and £36.50 overseas per annum (six copies). “Over 75% of Britain’s pilots and flight engineers belong to BALPA. Our membership is currently more than 9,000 – and growing every week. “BALPA is among the world’s largest flight crew associations – second in size only to the U S Air Line Pilots’ Association. As a specialist organisation we protect and improve the professional status, pay and conditions of our members. “As the voice of Britain’s aviation professionals our views are taken seriously by companies, the Civil Aviation Authority, Government and Parliament. BALPA is also well respected by the European Commission and international civil aviation bodies.”
Rating: 4 / 5
For further information about the research organizations that sponsored and supported the research described in this book, check out http://airline-ic.lerablog.org/
Rating: 5 / 5