The core components of labor relations in the airline industry are, in the first place, the participants of these relations, such as workers and management. Workers in the airline industry are occupied in such professions as flight attendants, pilots, and machinists (Bodie, 2019). Another core component of labor relations is the industrial conflict, which consists in the workers’ desire to receive higher wages (Bodie, 2019). The third core component is the activity of labor unions. A distinctive feature of the airline industry is that its workers are not united in a single union. On the contrary, flight attendants, machinists, and pilots are united into three separate unions that compete within the industry against each other for a greater share of wages (Bodie, 2019). Yet, these separate unions unite their efforts against shareholders and management.
Labor relations in the airline industry are regulated by the Railway Labor Act (RLA). Under the RLA, workers have the right to join unions and collectively bargain with their employer (Wensveen, 2016). The RLA also enables employees to expect the employer to adhere to the terms of the agreement. If the employer breaches the agreement, employees have the right to resolve a dispute with the help of a neutral arbitrator (Wensveen, 2016). National Mediation Board (NMB) mediates the resolution of disputes, and, under the RLA, mediation is mandatory (Wensveen, 2016). The RLA serves as a means of replacing strikes with bargaining, mediation, and arbitration to ensure the uninterrupted work of airlines and railroads.
The major sources of funding for the airlines can be internal and external. Internal sources include profits, or net earnings, deferred taxes, and depreciation (Wensveen, 2016). External sources are not generated internally and include such sources as debt financing, meaning borrowing money from banks and other institutions, and equity financing, that is, the sale of bonds and stocks to the public (Wensveen, 2016). According to Wensveen (2016), both cash management and financial planning in airlines depend on the cash budget. In the short term, airlines should manage finances so as to make maximum use of its available cash. For long-term financial planning, airlines should make up a long-term cash forecast to assess the impact of different factors, such as new equipment requirements and debt retirement, on the airline company’s balance sheet.
References
Bodie, M. T. (2019). Labor interests and corporate power. Boston University Law Review, 99(3), 1123-1149. Web.
Wensveen, J. (2016). Air transportation: A management perspective (8th ed.). Routledge.