02 November 2009

The Winter Of Discontent - Unions Unhappy

Three big Union stories over the last few days. Most of them unconnected but perhaps there is a thread of a change on the labour front.

Amongst airlines - both Hawaiian and British Airways face union trouble probably around Christmas time. For both carriers this is not the time. For Hawaii a disruption at HA will be devastating given the amount of traffic that is now on that airline.

Amongst the airframers - the impact of the decision by Boeing to open up a second line in South Carolina seems on the surface to be simply a cost issue. With Boeing stating that SC is 40% cheaper than Washington state (my home state btw) it is hard to see how Boeing could not have made this call. The union leadership in Washington should head the lesson of California. The labour market there was priced so high that ultimately it became too expensive for the manufacturers to remain in the region and operate profitably. Storied names like Douglas, Convair, etc etc have progressively left the market for cheaper locales or in most cases just headed into the twilight.

And let's not forget Airbus - they have a strong currency problem - the rise of the Euro means that essentially Airbus is now 40% more expensive. That means that Boeing should be able to take advantage of that. So if that is the case why does the A320 consistently outsell the 737NG?

What is needed is for a more honest and open dialogue between management and workers in these critical areas. Otherwise it becomes a game of who has the largest toy.

Sad really - lets hope they all kiss and make up.

Cheers

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