The Importance of Unionized Labor in the US Airline Industry

For Unionization
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The U.S air transport sector has faced several challenges over the past years. Starting in early 2009, the airlines experienced a 25 percent decrease in premium travel, while the attack of 9/11 served as the climax of the economic catastrophe (Goyal & Negi, 2014). Even as the airline industries try to recover from the economic downturn, the labor unions have been of great benefit to the companies. To begin with, labor unions play an important role in the U.S airline industry. Almost 49.3 percent of employees in the industry are union members (Hirsch, 2007). One reason why the unions are beneficial to the airline industry is the contract concessions provided by the unions (Hirsch, 2007). These contract concessions are most useful in situations where the industry is facing financial issues or in cases of bankruptcy. Since unions determine the benefits and wages of their members, there exists a tax cycle, whereby employees receive high compensation in situations where the airline is recording high profits and low compensation when the airline is recording losses. Also, employees who are registered as union members have higher wag...