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MIT Global Airline Industry Program Labor/Human Resource ...

Source: web.mit.edu
Topic: Airline Industry

Sort Desciption: competition in the global airline industry, we will explore .... Competition from Ryanair, along with the slump in the airline industry post 9/11, ...

Content Inside: Lean Production in the Air? Low Cost Competition in the Global Airline Industry and Implications for Employment Relations Industry Advisory Board Meeting October 26, 2006 Jody Hoffer Gittell, Brandeis University Thomas A. Kochan, MIT and colleagues Project: To understand low cost competition in global airline industry • MIT Global Airline Industry Program has global scope but so far primarily U.S. focused • Our project looks beyond U.S. to understand low cost competition in the global airline industry • Particularly the role of human resource strategies and the impact on employment relations • Goal is to produce a book with multiple case studies and an overall analysis • The following is a preliminary outline of book Introduction Jody Hoffer Gittell (Brandeis University) Greg Bamber (Griffith University) Thomas Kochan (MIT) • Describe transformation of global airline industry – low cost competition by new entrants – also by incumbent carriers, either through internal cost reductions or through low cost subsidiaries • Result is industry-wide reduction in fares and unit costs • From managerial and public policy standpoint, a need to understand how these cost reductions are being achieved Introduction (continued) • Low costs achieved through – product simplification • from no frills (Ryanair) • to low frills (Southwest) • to moderate frills (Germanwings, JetBlue, VirginBlue, American) – younger employees and aircraft – reductions in wages and benefits – increased employee and aircraft productivity Introduction (continued) • What is the different mix of human resource strategies airlines are using to achieve low costs? • Low road or zero/sum strategy – reduced wages/benefits • High road, mutual gains or “lean production” strategy – increased employee/aircraft productivity Introduction (continued) • Analyze trends in unit costs from 1995-2005 for U.S., Canada, Europe, Australia and Asia • Separate out †...

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