Airlines Seek to Cut Pay and Benefits Again
The Wall Street Journal recently reported that USAirways was seeking to reject certain labor contracts. As many know, the airline is in bankruptcy. It further wishes to reduce health and retirement benefits. You can view the article here. The unions have already taken a 21% pay cut and this rejection of the contracts would most likely result in further reductions in pay and benefits. While these cuts are presumably designed to enable the carrier to tansition from a traditional carrier to a low cost airline, the impact on employees is obviously dramatic. One can only hope that the airline is considering not only the strategic business implications of these changes on the bottom line, but also the strategic people implications of these changes. How loyal or demoralized will these employees be? Conversely, without these reductions can the airline survive? Only the future will tell. In the mean time, the employees continue to take significant blows as the airline transforms its business strategy.