Labor Relations Case Study

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Labor Relations This is an area where Southwest Airlines needs to focus more of their attention. Currently, Southwest Airlines, is approximately 85% unionized and the airline is trying to negotiate seven contracts concurrently. The ramp, operations and cargo unions have been working without a contract since 2011. The pilots and mechanics have not had a contract since 2012 and the flight attendants contract expired in 2013 (Leff, 2015). In a statement made by the president of Southwest Airlines’ Pilots Association, union representatives must do something while ongoing poor decisions are being made by management that are affecting our airlines passengers (Schlangenstein, 2016). Additionally, the union is also demanding the removal of CEO Gary …show more content…

Southwest Airlines has always proudly identified themselves as a low cost airline. They have successfully been able to incorporate Human Resource management, merger and acquisitions, financial performance and allocation of resources as part of their corporate strategy. When it comes to the meat and potatoes, Southwest Airlines has implemented a corporate value-creating strategy. Ultimately, because of this strategy, Southwest is surpassing its competitors and gaining a larger share of the market. Furthermore, this strategy is adding perceived value to its products and services by taking advantage of the economies of scope (Bradley, 2016). The airline’s business units can take advantage of their differentiation by lowering their cost structure. For example, Southwest Airlines 714 fleet consist of only one type of aircraft, the Boeing 737. The advantage of having one type of aircraft is extremely cost efficient as the airline only has to train mechanics to repair one type of aircraft and they only have to store parts for one type of aircraft therefore lowering overhead and human resources expenses which translates into lower fares to its passengers (Southwest, …show more content…

Southwest Airline’s ability to diversify, while limited, is still an option. When Southwest airlines first made its mark in the industry, it was a local carrier flying between Dallas, Houston and San Antonio. Today, Southwest fly’s internationally and is continually adding additional countries to its destination list. The introduction of its Amadeus Altéa reservations system is set to operate both the domestic and international bookings. The same competencies that helped establish Southwest Airlines in 1973, are being implemented today with its diversification and growth

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