US airline labour challenges as profits continue to soar. CAPA Americas Summit (VIDEO)

The record profitability of US airlines is creating a new set of dynamics for management-labour relationships of those companies. As various management teams work to stress their respective airlines are now run like high-grade industrial companies, and they aim to bolster shareholder returns, labour groups understandably believe that some caution needs to be exercised in capital deployment. Drivers of that logic include putting the theory of a transformed industry to the test during the next down cycle, and restoring employee pay rates to acceptable levels.

The new reality is that while management teams urge stakeholders, including labour, to embrace new industry paradigms, some airline employees are still feeling reverberations from concessions agreed during the last 10 to 15 years when most major US airlines reorganised under Chapter 11 of the US Bankruptcy Code. Memories of those sacrifices still run deep, and some employees feel they need to recapture fully what was lost in order to enter a new phase of labour-management relations.

In the meantime, many labour groups at various US airlines remain lodged in years-long negotiations with management teams, attempting to craft collective bargaining agreements to withstand the perpetual cyclicality in the airline business.