Airline Employment Conditions After Deregulation

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 By an eHow Contributor

 

These days, airplane travel is a fact of life for many people, considering it's the most efficient and fastest way to get from place to place, whether traveling for business, pleasure or a combination of the two. However, this was not always the case. Before the 1978 Airline Deregulation Act, the airline industry was run almost as a public utility, with very little effect from the market on the price of fares and, in turn, the employees' wages. Following this deregulation, the airline industry changed drastically. Fares plummeted, and along with them, the industry's employment conditions. Learning about these changes can be educational in understanding the effects of an unbridled market on a particular industry.

Hub-and-Spoke System

The hub-and-spoke system of air travel came into use soon after the Deregulation Act. This system centered air travel around several centralized locations, and has become the dominant form of airline travel. The hub-and-spoke system results in higher costs for the industry, which are made up for with lower wages and pensions, which makes the working environment much less lucrative and desirable.

Airline Mechanic Wages

In the seven years between 1978 from 1985, wages fell significantly for airline mechanics. When the Deregulation Act was passed, wages for most airline mechanics were about the same across the industry. However, as of 1985, wage differentials had definitely opened up in the industry, with the more successful airlines paying significantly more than the less successful ones.

Labor Unions

Airline labor unions now enjoy much less power than they had before. Before deregulation, the unions had managed to push for high wages and what some deemed as inefficient work rules. This all changed with deregulation. Workers found themselves facing more stringent work rules, as well as occasional job losses.

Computerized Systems

Overall, much of the work involved in selling tickets, allocating seats and processing customer requests has been computerized. Computerized reservation systems first came into use in the late 1960s, but came into wider use after airline deregulation as a way of cutting costs.

Unemployment Benefits

One of the benefits for airline workers was the offering of greater unemployment benefits to employees who lost their jobs. This was included in the 1978 Act as a way of appeasing workers.

Overall Affect

In general, airline employees have found themselves with fewer jobs and higher demands on their productivity, as can be seen when airline mechanics' work environment is examined. Pilots have also been hard hit by the effects of deregulation. While the airline industry has become more profitable and affordable, workers in the industry have lost jobs, wages and benefits.

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