Labor Relations and Collective Bargaining- American Airlines

Labor Relations and Collective Bargaining- American Airlines

If Mr. Carty's comments on labor costs being part of a cost structure that is higher than revenue are part of American Airlines positioning before contract negotiations, what other preparations is the company probably taking prior to the negotiation process?

The bankruptcy case of the American airlines attempted to abolish the old contract with the labors which are in this case the pilots. The new contract provided them with the totally new framework of the costs that includes lower costs and an opportunity to work with more flexibility than before. This refers to the cutting down of the labor costs that are lower than the cost structure that was previously approved by the company in the contract agreements with the pilot associations. It happened due to the fact that the APA that is the allied pilots association tend to reject the old contract agreement and influenced the American airlines to develop a new agreement for them that required negotiations over it. The spokesman of American airlines on the behalf of the current chief executive officer of the company announced the development of the new contract agreement with the pilot associations of the airline.

The restructure process could have provided significant impact on the airline if it was implemented at the time of Don Carty's leadership. The company should have analyzed the preparations prior to the negotiation process with the labors in order to effectively implement the concept of labor relations and collective bargaining in the organization. The cost cutting strategy was termed as the necessary action by the company after the event of September 2001 (Orenic, 2009). The strategy enabled the company to bring down their capacity in the market to balance with the number of passengers of the airline. This action brought about the inclusion of government in the airlines and they cut down their costs on the expense of the traveling passengers that is the general public and the employees of American airlines that are the labors and workers. The company could have prepared their strategies for the future based on the response expected in lieu of the strategy announced by the airline in the marketplace. As a result, the company has faced a severe back down in the demand of customers and revenues. The company should have installed more and more capacity in order to strengthen the revenues of the company and increase the services according to the demands of the passengers. The airline could have prepared an agreement to restore back the wages of the employees just after the crisis handling process in order to retain and maintain the market position of the American airlines (Hollenbeck & Wright, 2006).

Mr Carty mentions involvement of the federal government in labor relations. What government agencies could he possibly be referring to?

Don Carty has referred to the congressional committee of America that has showed significant involvement in the labor relations process of the ...