خطوط هوایی کم هزینه :: مدل کسب و کار و روابط شغلی

The passenger air travel industry is experiencing increasing competition between low cost/no frills carriers (LCC) and the more traditional full service carriers. This paper explores the comparative business models with a view to identifying areas where these might be expected to generate different HR and employment relations practices, and checking the findings against available evidence. While some of the expectations are confirmed, unionisation is higher than anticipated in the LCC sector and a relatively high percentage of staff were on regular rather than contingent contracts. Differences in approach are observed among LCC airlines, and the evidence indicates some convergence between the two sectors as competition heightens.

The passenger air travel industry is characterised by the emergence of a low-cost/no frills sector alongside and partly in competition with the incumbent full service carriers.1 These two sectors offer strong contrasts in their business and competitive strategy, effectively providing competing models of operation. Although it is now widely accepted that there is no necessary and unique connection between an organisation’s business model and its HR and employment relations strategy, there is still some expectation that the latter will be influenced by, and have some interaction with, the business strategy. The aim of this short paper is to explore the comparative business models (Section 2), to identify areas where these might be expected to generate different HR and employment relations practices (Section 3), and check these expectations against the available evidence. This may in turn raise questions regarding tendencies to divergence or convergence between the two sectors, and about their respective HR responses to major market shocks.

In general, our expectations are reasonably well supported by the evidence so far. However, although pay and working conditions generally follow prediction, unionisation is higher than expected in LCCs (possibly explained by the start-up LCCs recruiting staff from the FSCs, where they were already unionised); and half the workforce enjoys regular (unlimited) rather than contingent contracts. The overall picture, however would seem to support the general proposition that the LCCs would be more flexible and entrepreneurial, and therefore better equipped to respond to opportunities – and to change and/or market shocks (such as 9/11—though in fairness it should be pointed out that the national ‘flag’ airlines were more likely to be terrorist targets). On the down side, the lower pay and conditions offered by the LCCs might be suggestive of an exploitative employment contract (though we have no comparison of the respective human capital profiles on which to judge). This might be reflected in higher turnover rates in the LCCs9 and lower job satisfaction or low morale. But against this, we have the evidence of a paternalistic approach on the part of at least some LCCs and (following the pioneering Southwest model based on careful recruitment of staff with the right attitudes for this airline) a strong loyalty and high commitment (as for example in Virgin Blue). In other words, there may be a fairly complex set of influences at work here within the psychological contract, where somewhat lower pay and conditions are balanced by other positive factors in the implicit contract: this might include the (unexpected) high level of unionisation, providing an outlet for employee voice) or a high level of employee loyalty. That would tend to support the unitarist thesis, in contrast to the FSCs, where recent evidence from airlines such as British Airways and Aer Lingus10 suggests greater conflict in the employment relation (disputes, strikes and other industrial action affecting different groups of staff). We have noted earlier the response of some of the FSCs to the LCC challenge, by either setting up their own low cost alternative (carrier within carrier) or adapting their own model to borrow some of the key characteristics of the LCCs. The evidence on this indicates (a) that the carrier within carrier model is rarely successful since the operational structure and high service culture do not sit easily in the no-frills paradigm: (b) the cost discrepancy cannot be made up by marginal adjustment to the basic FSC model, so that although costs have been cut the cost advantage is still sizeable. Real cost savings are more likely to be made by major staff cuts and economies in sub-contract arrangements – but these will tend to reinforce the compliance tendency of the FSCs, increase concerns about employment security, reduce trust and generate grievances and a confrontational rather than cooperative employment relationship. As yet, however, the development of the ‘some frills’ market is in its infancy and there is little doubt that further innovation and experimentation will take place in the near future.