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Submitted by runwayheading on February 24, 2007
Category: Miscellaneous
Words: 1147 | Pages: 5
Views: 231
Popularity Rank: 48,653
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As the legacy airlines of the United States restructure themselves for the competitive industry environment of the 21st century, traditional ways of doing business are evolving in a manner that permits established air carriers with high operational costs to reduce their operating costs to a level allowing them to compete on a cost basis with upstart low cost airlines. Labor and fuel are the biggest expenses burdening the airline industry. Significant changes in the operational model illustrating how aircraft ground handling and passenger service functions are provided in smaller, non hub cities with few flights and low employee productivity is under development.
Historically, most major legacy air carriers in the United States utilized their own staff in almost every location to which they provided service. Often times these "outstations" have very few flights spaced throughout the day which provided for frequent periods of employee inactivity thus resulting in low productivity levels. Work rule requirements (many established through employee lucrative, old school collective bargaining agreements) for items such as employee scheduling and the ratio of part to full time employees limited scheduling flexibility and potential efficiencies. Many airlines have managed to bargain new agreements with unions that have allowed for changes in the staffing of smaller cities through the increased use of part time employees or the outsourcing of many former union functions in "non hub" locations. This has resulted in the increase usage of vendor companies to provide aircraft ground handling and passenger service functions resulting in labor cost savings due to lower wage rates and higher employee turnover (less expense related to employee longevity).
However, it is a complex process to transition an airline operation to a vendor while maintaining flight schedule integrity, customer service and regulatory standards. The following will illustrate operational...
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