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perhaps at the stage where planning software was 15 years ago. While research is active
and hardware and data support have improved substantially, optimization-based decision
support tools for rapid recovery are still at an early stage of implementation at the major
airlines. This represents a difficult, but crucial future challenge.

10
Labor Relations and Human
Resource Management in the
Airline Industry1
Jody Hoffer Gittell, Andrew von Nordenflycht, Thomas A. Kochan,
Robert McKersie and Greg J. Bamber
Labor relations (LR) and human resource (HR) management are two aspects of the
employment relationship, reflecting the ways that firms relate to their employees.
The employment relationship is especially important in the airline industry, given its
service-intensive nature, its high ratio of labor costs to total costs, and the high level
of union representation in the industry. Employees have the ability to affect airline
performance in significant ways, both positively and negatively. Through collective
bargaining, employees can achieve higher wages and employment security but this can
leave firms with higher costs and less operating flexibility. Furthermore, employees can
impose additional costs in the process of setting those wages and employment conditions,
through strikes or other service disruptions. At the same time, employees can also add
significant value, with the potential to play a major role in lowering unit costs through
their coordinated and committed efforts and through their productivity-enhancing ideas,
and a major role in delivering high-quality service through their friendly, responsive
interactions with customers.
Evidence shows that front-line employees play a critical role in achieving quality and
productivity outcomes in the airline industry (Gittell, 2003). As a result, airlines around
1 For much more information and analysis of the issues in this chapter, see Bamber et al . (2009). The authors of
this chapter participate in the Airline Industry Council’s international research network. They acknowledge that
this chapter draws on the work conducted by many others in the network. A series of articles from this network
will be published in 2009 in the International Journal of Human Resource Management .
The Global Ai rline I ndustry Edited By Peter Belobaba, Amedeo Odoni and Cynthia Barnhart