Labor relations in the airline industry are in crisis. Two major carriers are struggling to come out of bankruptcy after negotiating deep concessions with their unions, while others obtained or are seeking similar concessions to avoid bankruptcy. All the big hub-and-spoke carriers are searching for a business model that works. Significant changes are needed in the structure and practice of the industry’s labor relations system.Meanwhile, airline industry performance is deteriorating. Already low customer satisfaction is declining. The industry lost $8 billion in 2001, and losses continue to mount. Is labor law at least partially to blame for these troubles? An influential U.S. Senator and some industry leaders recently called for reform of the Railway Labor Act (RLA) to give the Secretary of Transportation the power to impose final-offer arbitration in certain situations.These pressures, coupled with the uncertainties of a struggling economy, create a window of opportunity to introduce significant changes in practice and policy. Management, labor, and government leaders who share responsibilities for labor relations in the industry need to be informed by concrete evidence to discuss what should be done.1
