The airline industry is very influential, as it includes many services and unites various areas of activity, for example, cargo transportation and tourism. It also requires significant coordination between different processes and destinations. As a result, the industry gives jobs to many people. Any shocks and changes in the airline can affect employees. An example of such an event is the Airline Deregulation of 1978 – the removal of federal power over the industry to boost competition (Peterson, 2018). Although in labor relations, deregulation led to large-scale layoffs a few years after the introduction, in the long term, its impact is assessed more positively.
Deregulation has led to the transformation of the airline industry from a regulated environment to an unregulated market. Changes had significant implications – airports were closed, shareholders lost their investments, and some companies were absorbed (Peterson, 2018). The deregulation’s critical effect on labor relations manifested in layoffs. The changes showed that wages in the industry were not economically justified, and it was necessary to cut costs. Consequently, many employees lost their jobs, and companies used outsourcing services (Peterson, 2018). During ten years, the situation changed – the salaries of employees hired before deregulation remained high, and new employees had lower wages. Overall, Peterson (2018) considers deregulation successful – services demand has increased and employee salaries have risen. Nevertheless, other shocks as a global pandemic brought new challenges.
Thus, the Airline Deregulation of 1978 significantly changed the airline industry. Initially, such fundamental changes had many negative consequences, including labor relations. The demand to cut costs has led to layoffs, the search for new hiring opportunities, and lower salary levels. At the same time, some period after deregulation, the consequences were assessed more positively as the industry developed and gave work to many people.
Reference
Peterson, R. (2018). Impacts of airline deregulation. TR News, 315, 10-17. Web.