Is Bigger Really Better Essay, Research Paper
?Does Bigger Really Mean Better
When looking at the aviation industry?s desire to merge into one mecca airline, a
good example is with United Airlines and US Airways, many consumers forget about
those who are actually working for those airlines ?Consumers beware – further
consolidation could lead to higher prices and poorer service?(Marks). Sure bringing
together two ideas to make the route system of one particualar airline vaster, but the
effects on the employees can be very stressful and sometime tragic. Regardless of whos
buying who, or whos becoming who, all possible efforts are made to keep all the
employees of both still working. However, due to the overload on personnel many,
especially those with less senority, are put on reserve or furlowed. So how good is it
really for airlines to merge? Two key factors need to be considered when looking at the
airline mergers, the benefits for the consumers and the job security of the employees.
Professor Darryl Jenkins, director of the Aviation Institute at George Washington
University states, ?My nightmare of consolidation is that it will leave us with a very
unhealthy airline industry, and that seems to me more probable than anything
else?(Marks). Everybody seems to be worried about helping out everyone at the
sametime. But as history has proven many times over, you cannot appease everyone all
the time. And with this sudden intrest in the consmer all the time, the value of the
employees get overlooked.
April Grigg, a first officer, pilot, with United Airlines says:
?I am worried that being a new employee at United. Well, for one thing the
integration of seniority lists is going to be a nightmare..at United, there are
people who stand to lose a great deal of seniority if they go strictly by date of hire
and seniority is everything at an airline…it decides your vacation, work schedules,
This obvious concern for advancement from one airline employee also reflects upon the
rest, not to mention those that are incoming.
Another big concern that comes with a companys egerness to want to purchace
another airline is looking at how the economy is doing at that time. Sure lately the
economy has been great and maybe never better, however ?. . . some airline analysts say
the carriers themselves may want to think twice before merging for their own financial
health . . . The company has also just signed a record contract with its pilots, and the
economy is flirting with a recession?(Marks).
Because of such concerns, airlines have established unions and union
representitives to protect the interests of such actions. Surprisingly enough, in the case
of American Airlines merging with Trans World Airlines (TWA), many of the unions
will not support this transaction. The leaders of three unions said they ?. . . have yet to
receive the assurances from management concening the benefits, job protections and
career expectations that our members deserve?(?Unions?).
American Airlines just went through another big merger only a few years ago. In
1998 American bought out another small, west coast based carrier Reno Air and due to
this, ?The 11,000 pilots, who begin contract negotiations this summer, protested
American?s 1998 purchace of Reno Air and caused the cancelation of more than 6,000
flights?(?Unions?). How many flights are going to be cancelled this time. Not only for
American but how about now United Airlines.
Since the Deregulation Act of 1978, airliners have been able to expand their
service and partners without the interferance of the government. Hence the deregulation.
But lately the government has felt that it is necessary to step back into the deciding light
to help maintain the integrity of the industry. Kevin Mitchell, chairman of the Business
Travel Coalition (BTC) says in regards to congresses proposed antitrust bill for airline
mergers, ?Moreover, this bill also recognizes that the problems of inadequate
competition levels, eroding passenger service levels and aviation system gridlock are
inextricably linked?(Mitchell). How is this supposed to make the industry service better
on either the crews or the passengers?
So how good is it really for airlines to merge? It may come as somewhat ironic
that an airline named ?United? is trying to buy up all they can and become the largest
carrier in the system. But who are they trying to unite? The crews, the passengers, or
maybe it is the world that they are trying to unite. All-in-all, it is the ideas of a few, if
not several, members of a board or committee that makes these decissions. They could
care less about the consumer or more inportantly the employees that keep that company
running. With further consolidation an employee will have less opportunity for diversity,
and be subject to more rigid guidelines. How much better is that!
Grigg, April. Telephone interview. 19 April 2001.
Marks, Alexandra. ?Critics of Airline Mergers Launch Countermoves.? Christian Science
Monitor Vol. 93 Issue 86 (2001): pp.2
Mitchell, Kevin P. Airline Competition Concentration. U.S. Senate Judiciary Subcommittee on
Antitrust. Washington: FDCH Congressional Testimony, 21 Mar. 2001
?Unions Won?t Support American?s Purchase of TWA.? AP Worldstream 28 Mar. 2001