‘Summer of Discontent’ heads into Autumn?
SYDNEY (Centre for Asia Pacific Aviation) The ‘Summer of Discontent’ in the aviation industry predicted in previous editions of Aviation Executive Monthly has arrived like a hot desert wind. Strikes by crew and/or ground staff at airlines and airports on virtually every continent, including in South Korea, Argentina, South Africa, the UK and New Zealand, have crippled airline schedules in recent weeks, providing considerable inconvenience for passengers.
Asiana Airlines pilots’ 25-day strike resulted in the cancellation of thousands of passenger and cargo services. It caused the government to invoke emergency powers for only the third time ever to break the dispute, which generated significant losses for the airline and associated industries in South Korea.
But many of the disputes in recent weeks, including Asiana’s, are unresolved, while others are simmering and could boil over in coming weeks.
A long-standing dispute between Northwest Airlines and its mechanics could end in a major strike in the US from 20 August, an outcome for which the carrier stated it is prepared. But a protracted strike could significantly weaken Northwest, potentially causing it to slide into bankruptcy.
The recent run of significant labour action reflects the tough stance management is taking on costs, as fuel prices continue to touch record levels and competition intensifies.
The process of cost reduction at full service carriers is ongoing, as they seek to mimic their low cost carrier (LCC) counterparts. But cultural issues remain a barrier for the full services airlines coming from a heritage of premium services, whereas the DNA of LCC culture is a relentless focus on cost reduction.
With no respite in fuel costs in sight, airlines will have no choice but to seek further significant cuts and productivity from other areas, including labour. Further pain for airline employees – and travellers – appears unavoidable.