Significant Union Bargaining Between 1978 and 2009 in Aviation Industry
|1978||Airline Deregulation Act was passed by the Congress. The purpose of the bill was to promote competition in the aviation industry as well as eliminate monopoly in the aviation industry (Williams, 2017). Thus, the bill lowered Airline prices that increased passengers in the aviation.|
|1979||Jet fuel increased by 88% this affected the aviation industries since the companies had already lowered the transport charges.|
|1980||Higher fuel prices made the companies in the aviation industry made loss. This led to a continuation of labor strife that started after Deregulation act (Williams, 2017).|
|1981||Professional Air Traffic Controllers Organization (PATCO) announced a strike. The PATCO demanded employees wage to be increased and also demanded shorter working hours (Williams, 2017).
The striking air traffic controllers were fired by the President Reagan. Also, the striking members were banned from being hired again.
The federal Aviation Administration (FAA) instructed that all airlines company to reduce their flights by one-third.
|1982||The Brianiff Airlines files Bankrup and stopped it a regeyation.t. Also, the Braniff
rn Air Lines acquires Braniff Airlines’ South American routes; Braniff files for bankruptcy and ceased operations.
|1985||Southwest buys the financially struggling Muse Air. The Musa Air was bough b the Southwest airline.|
|1986||Northwest Airlines merged with the Republic Air. The merge of these two countries was opposed by the Justice Department of the government. The merger of these to carry led to the formation of the Northwest Airlines. Also, the same year TWA airlines merged with Ozark (Williams, 2017). The merger of these two led to creation of the sixth-largest commercial air carrier.|
|1987||NATCA is certified as the only bargaining authority for Air traffic controllers by the Federal Aviation leading to disbandment of the PATCO. NATCA is certified as the sole bargaining unit for air-traffic controllers employed by the FAA.
Also, in the same year Frontier, people express and New York Air merged together form continental airways. Moreover, the delta corporations merged with Western Airlines. The merger of these two countries was rejected by the Supreme Court but later allowed the merger.
|1988||US Air purchased PSA|
|1990||American Airline acquires Eastern Airlines routes.|
|1991||Eastern Air Lines ceases it operations and airline shutdown|
|Pan Am Airlines closed it operations.|
|1993||Southwest airlines bought Morris Airline. The same year President Clinton changed president Reagan stance of prohibiting of re-hiring the traffic controllers who participated in the strike|
|1997||ValuJet Airways merges with AirWays Corp., and becomes AirTran Airways|
|1999||American Airways purchased Reno Airways. Reno Airways was struggling before its sale.|
|2001||American Airways bought the TWA airlines.|
|2005||US Airways merged with the American West Airlines|
|2008||Delta Airlines merged with the Northwest to form a strong company.|
Stages Air Transport Sector has gone through in the Deregulation Era
Since the deregulation act, the air transport has gone through some stages. In a deregulated environment, the government has no control over the business entry and prices in the aviation industries. Since the deregulation era was introduced in 1978, the aviation industry has gone through expansion, consolidation, concentration and globalization stages.
After the introduction of the deregulation act, the government increased competition in the aviation industry. Thus, it eliminated prices control, and market entry and exit control. Therefore, this act opened the door for companies to join aviation industry which in turn increased competition in the industry. The deregulation led to the expansion of the aviation industry as more airline company joined this market. Thus the first stage is expansion stage. The expansion of aviation industry led to the labor union to demand wage increment and shorter working hours.
Deregulation allowed more companies to join the aviation industry. This led to high competition in the industry as the new companies charged fare at lower prices causing the big companies to reduce their prices (Goetz & Sutton, 2017). Due to high competition and high prices of jet fuel, the companies in the industry experienced difficulties and managed low profits. Some companies like Braniff became bankrupt (Goetz & Sutton, 2017). To avoid being outset from the industry companies started merging. This led to consolidation in the aviation industry. Thus the second stage is consolidation. The consolidation led to the formation of the labor union that addressed the need for the air control traffic workers.
As the market consolidated and the companies merged, the companies concentrated its business focus on the certain geographical area. Thus the third stage of the deregulation era was the concentrations. The companies concentrated their strategies on the certain market. This concentration helped the companies to remain competitive in the market. The concentration led to labor union’s demand more employees in the industry (Goetz, & Sutton, 2017).
The last stage that aviation industry has gone through since the deregulation is globalization. After there was a high concentration of companies in the aviation industry operating within the United States, the companies start looking to expand their services to international market. Thus, the companies started offering international destinations flights. Thus, due to high competition in the industry that was brought by deregulation, this led to globalization.
Button, K. (Ed.). (2017). Airline deregulation: international experiences (Vol. 1). Routledge.
Goetz, A. R., & Sutton, C. J. (2017). US Airline Industry. Low Cost Carriers:” Emergence, Expansion and Evolution”, 199.
Williams, G. (2017). The airline industry and the impact of deregulation. Routledge.