Since the 1980s the situation in the civil aviation industry has changed dramatically, and although the government still retains some form of in-direct control over the aviation sector and the ‘former’ national airlines in specific, issues related to economization and efficiency of the business enterprise take primacy in dictating strategic and operational decisions of the airline operators. This shift in the approach to the regulation of the aviation sector around the globe has also greatly influenced issues related to workforce organization in this industry, especially in the Western world.
In this report, the shift in the approach to employee relations will be discussed based on the case of one of world’s biggest airlines – British Airways. A concise environmental analysis will be presented with a special focus on the implications the changing political, economic, industrial, legislative, social and technical conditions had on employee relations. Further indications of the progress within the employee relations strategy that relates to building the ‘new model’ of workplace arrangements concerned with partnership, employee involvement, training and rising skills, will be explored.
2. Environmental Analysis
Various macro- and micro-environmental factors influenced the way British aviation industry and specifically British Airways organizes its business operations nowadays. This in turn has strong implications on the way the company approaches its workforce arrangements. In this section the main environmental forces that are in a continuous state of flux will be presented – political, economic, industrial, legal, social and technological issues (The Times, 2010).
2.1. Political and legal factors
One of the main factors influencing the aviation industry from the political and legal perspective is the development of freedom of movement and trade in the European Union. The opening of new markets within the EU exposed many national carriers to strong competition. This trend has been furthered by the continuous liberalization of the global aviation industry and specifically the recent OpenSkies agreement between EU and the US which allows the national carriers to arrange the Atlantic flights from the airports that are not airlines’ ports of origin. (BATA, 2010).
Latest developments on the British political scene create strong pressure on the costs of operations for all the British carriers. The recently proposed raised taxation will put a huge disadvantage on the British civil aviation industry. The new Government (2010) also introduced policy of blocking airport expansion in the South East of England (McGhie, 2010).
2.2 Economic factors
From the economic perspective there have been few main points of pressure on the strategy of British Airways. The 2008 global recession, the worst economic downturn since 1930s, continuous high unemployment rates, along with the fluctuation of the British Pound continue to...