Airlines forcibly take to downsizing

By SiliconIndia Wednesday, 24 September 2008, 09:34 IST

Mumbai: The slowdown has brought all Indian airlines under a similar consensus on
downsizing its base as a measure to cut costs. While JetLite is expected to cut off its
employee base by 750 employees, experts predict that Kingfisher shall bank on
offering pink slips to 300 employees.

Infact, GoAir has already scraped off 150 employees from its total workforce. Apart
from direct job cuts, there are other indirect measures employed by the airlines like
national carrier Air-India is mulling sending employees on five-year leave without
pay. Even SpiceJet may not renew expat pilots' contracts. After slashing off
employees from the administration, security and flight operations, the airlines are
being forced by the hostile operational costs to cut jobs even in technical
departments like pilot training and engineering.

These companies are banking on the job cuts to save on their costs by atleast 10
crore, with JetLite hoarding on 20-25 crore and Kingfisher saving around 10 crores
annually.

What Is the Airline Industry?

The airline industry is a global market based around the transport of goods or
passengers by air. Airline corporations range in size from huge multinationals,
making hundreds of flights daily, to a tiny regional company that depends on a
single plane. Airlines provide crucial support to businesses, governments and
individuals who depend on international travel or commerce. Despite some rocky
financial periods, the airline industry plays an essential role in maintaining a global
economy.

Working for Airlines and Airports - The Good and Bad

Whatever your position, working for an airline or at an airport is not always easy.

You'll be on the go at all times. Because the air industry is one that lives and dies by
customer satisfaction, you'll be expected at all times to work quickly and efficiently
under deadline pressure.
You should also be prepared for long hours and, depending on your position, long
periods away from home. Many air carriers require pilots, reservation sales agents,
and flight attendants to relocate to their operation hubs or cities with major
airports. The irregular schedules and jet lag can cause fatigue and even job
burnout.

Certain positions, such as cargo handler jobs, maintenance mechanic, and ramp
agent, can be physically demanding. As a ramp coordinator explains:

It can get into some pretty hard physical labor. It can be dangerous. You are
working in close quarters with all different kinds of machinery. It's loud.

In addition, you must be prepared to work hard before you're able to move out of
your first position. The air industry is competitive, and with the demand for upper-
level jobs outweighing the number of positions, you'll truly have to stand out in any
one position before you are offered a promotion.

In the words of a longtime airline employee:

A lot of people who come into an airline position see themselves moving up the
ladder right away, but the reality is there aren't a lot of positions above them, so
there's a lot of competition. They think they're on the fast track and they'll only be
at their job a little while before they are promoted, and when that doesn't happen
right away, people get frustrated. So you need to make sure you can be happy
doing the job you're hired for if you want to make a career for yourself.

Similarly, working for an airport can mean long and demanding hours. An airport is
very customer service oriented, and you are part of the team that keeps an airport
comfortable, clean, and user-friendly for visitors.

Although there is not as much customer interaction as there is working for airlines,
the customer still comes first in the airport. Working conditions vary according to
the size of the airport and the type of position held. Some workers sit in an office all
day while others are out and about in the airport, dealing with travelers, answering
questions, and giving directions.

Customer Demands

Flights don't always go off as planned, and when that happens, nearly all employees
are affected. Flight attendants, customer service agents, ramp agents, ticket
agents, and other workers must deal with difficult passengers, poor weather
conditions, emergency situations, and delayed flights.

As a flight attendant explains:

In your flight attendant career you'll have to deal with a disgruntled customer so
you'll have to be a good mediator and stay pleasant under duress.

Customers get cranky when their plans are off schedule, baggage sometimes gets
lost, and flights on occasion must be canceled or rerouted. Through it all, airline
employees are expected to keep an upbeat attitude and provide excellent service.

As an airline customer service manager says:

The drawbacks of the job are that you have to deal with irate customers for
something you had nothing to do with. You have to be able to respond to their
frustrations without getting personally involved.

A former airline customer service representative adds:

You have to be really customer service oriented. Most airlines strive for that. You
have to listen to people.
Furloughs & Layoffs

Another complaint among airline employees is the risk of being laid off or
furloughed.

With the recent uncertainty and upheaval in the air industry, new hires can be
susceptible to layoffs, though as employees gain seniority and experience their job
security steadily improves, thanks to union agreements with most airlines. Being
laid off means your employment with an airline or airport is terminated. Being
furloughed means you are still an employee but there is no work for you. You are
entitled to draw unemployment while waiting to return to work. The advantage of
waiting out a furlough is that when called back to work you will retain your seniority.
If you leave for a job at another airline you will be forced to start over with that
employer.

An industry insider who has weathered over thirty years in the business explains:

The cost of operating airlines is such that there can be big layoffs. If an airline has
to downsize they go strictly by seniority. That's one of the drawbacks.

Work Schedules

Airline and airport employees have some of the toughest schedules of any industry.
Because of the round-the-clock nature of the industry, workers in all divisions of
airline companies and at airports - from pilots to cargo handlers to customer service
representatives - work evenings, weekends, and holidays. This is perhaps one of the
most difficult aspects of air industry work to get used to.

As a former airline employee explains:

Don't expect it to be glamorous. It's hard work. You really have to be ready for
anything. You might be asked to start work at 5am or finish work at 1am.

And as the hiring manager of a large international airport reminds applicants:

An airport is a 24-hour operation. We are like a mini-city, and things don't just stop
when the sun goes down. Those just coming on can be stuck with night shifts.

Weather Conditions

Certain positions within the air industry are particularly strenuous. Many employees
working in the airport, especially those on the airfields, are required to carry on
their job functions in all types of weather. Ground service personnel must be
prepared to load and unload baggage, fuel up an aircraft, and operate various
machinery even in very low visibility weather conditions; flying schedules must still
be running as close to smooth as possible even in a lightning storm or blizzard.

One ground services employee is quick to warn:

Many new hires leave after a few months because they were expecting that it would
just be standing on the field with some flags and directing airplanes. People have to
realize that ground service personnel often have to do a lot of physically strenuous
activities in various weather conditions, especially in certain areas of the country. If
it's snowing one day you can't just say that you don't feel like working.

Delta's Comair announces major downsizing

By Aaron Karp | September 2, 2010

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Comair CRJ 700. Photo: Courtesy, Comair.

Delta Air Lines regional subsidiary Comair said Wednesday it will retire 49 50-seat CRJs by the
end of 2012 and also "realign our staffing over the next two years to support the new, smaller
size of the airline."

The Cincinnati-based carrier, which is DL's only wholly owned regional subsidiary following the
sales this summer of Mesaba and Compass Airlines (ATW Daily News, July 2), said it will
operate a fleet of 44 aircraft by the end of 2012, fewer than half of its current fleet of 93. It will
retire 19 CRJ100/200 aircraft in 2011 and another 30 in 2012, leaving it with just 16 50-seat jets.
It will retain its 15 CRJ700s and 13 CRJ900s.

In a memo to employees, President John Bendoraitis did not specify how many of Comair's
approximately 2,500 workers would be laid off or accept voluntary redundancy. "All
departments and areas will be impacted, with the number of reductions varying by department,"
he wrote. "By the end of 2012, staffing will be commensurate with what is needed to run a 44-
aircraft operation."

Explaining the downsizing, he said, "Our need to change is significant, and the scope of change
will be difficult but necessary. Our current cost structure…remains approximately 20% higher
than our peers on a cost-per-block-hour basis [and] does not enable us to be competitive in the
current industry environment."

He said the carrier will soon begin negotiations with the three unions representing its workers:
the Air Line Pilots Assn., International Assn. of Machinists and International Brotherhood of
Teamsters. "Securing new, competitive agreements with these groups is critical to our success,"
Bendoraitis stated.

Despite all the trendy rhetoric about the importance of people, leadership, and values, far too
many managers treat people in their organizations with about as much care and concern as so
many numbers on a financial statement. They are just one more set of assets to be managed.
These just happen to have skin wrapped around them. Phrases like "head count" dehumanize and
objectify people. That's how we talked about cattle on the farm where I grew up. And that's
exactly how too many managers view "their people."
This thinly disguised contempt most clearly shows up when managers jump into layoffs and
downsizing as a first, rather than last step, when facing the need to cut costs. The airline industry
provides a revealing study in contrasts and leadership. Following the steep drop in air travel after
September 11, more than 100,000 people in the industry were laid off in North America. But in
keeping with their no-layoffs pledge, Dallas-based Southwest Airlines didn't downsize anyone.
To help the company weather the tough times, employees, on their own, initiated a program they
called "Pledge to LUV" (the company's stock symbol). They voluntarily gave up hours and days
of paid time to help the company reduce costs and avoid layoffs.

Over the last decade numerous studies have shown that "dumbsizing" sometimes provides short-
term relief – and protects shortsighted manager's bonuses – while hurting companies in the long-
term:

• An American Management Association study in 1996 found that fewer than half of the
firms that downsized subsequently increased their profits, and only a third reported
higher productivity.
• The Wall Street Journal reported that downsizing companies outperform the Standard &
Poor's 500 list only slightly during the six months following news of a restructuring, then
lag badly, with their stock down 24 per cent by the end of three years.
• Last year, a Mercer Management Consulting study, tracking the performance of 800
companies between 1987 and 1992, found that of the 120 that cut costs during the last
recession, only one in three achieved profitable revenue growth during the five years that
followed.

As Don Cherry might say, it sure ain't rocket surgery. Downsizing hurts morale and productivity.
Falling sales decline further, customer service slips, and quality drops. Absenteeism goes up and
accidents increase as stress, insecurity, and resentment grows.

Since tenure rather than performance usually determines who goes and who stays, the worst
supervisors and managers stay behind and add to the misery index. The high performers who
weren't downsized jump ship and further weaken the organization. This growing leadership
vacuum accelerates feeling of hopelessness.

Mass layoffs are always a very last, desperate step for organizations with strong leaders who
truly care about people. At the center of this rare leadership are core values around partnership
and participation. Organizational members aren't "heads," "warm bodies," or "human resources"
to be acquired and disposed of like assets on a balance sheet.

High performing organizations manage things and lead people. That means working together
when the financial heat is on to reduce costs through initiatives such as cross-the-board salary
reductions, with the deepest percentage cuts going to senior management. (They made most of
the decisions that created this problem.)

Other initiatives include reduced workweeks or hours or offering leaves of absences, either
unpaid or at a fraction of salary. Voluntary sabbaticals can also save a company money, as do the
reduction of executive perks.
Other efforts include:

• Redeploying people to revenue building positions

• Offering early retirement or voluntary separation packages
• Identifying and removing underperforming supervisors and managers, especially those
with weak people leadership skills
• Work sharing
• Not replacing people who leave on their own or retire
• Redeploying or lending staff to clients or external partners
• Shared ownership or equity in exchange for salary reductions
• Involving people in identifying unnecessary costs, waste, and errors that could be reduced
or eliminated

Anybody we hire that is a mechanic has to have an airframe and powerplant

mechanic's certification. The A&P course is basically a two-year program requiring
thirty hours per week of course instruction before you are eligible to take the FAA
test. So there's a considerable amount of time dedication for someone considering
getting into A&P mechanics.

In order to get hired as an aviation mechanic you must have an airframe or

powerplant license, experience with the type of aircraft you will be working on, a
high school diploma or its equivalent, and a good driving record and the ability to
drive trucks, hangar vehicles, or other motorized equipment. Most of the major
airlines require up to five years of experience working on heavy jets before they will
consider you for a job.

You'll also be expected to have good communication skills, be able to lift up to fifty
pounds, work under pressure and as a team player, and be willing to work
weekends, nights, holidays, and overtime. Many airlines will require you to have
your own set of tools to perform routine aircraft maintenance.

A manager who is responsible for hiring A&P mechanics describes the current hiring
outlook and gives his own advice:

We're not looking for someone who just has a piece of paper and the tools to do the
job and the willingness to work in a team atmosphere. Basically an individual has to
be highly motivated. It's so competitive. We are looking for people who show
enthusiasm and have a good attitude. We want someone who is dedicated and
motivated to give us what we need to keep things going well.
In order to qualify to take the FAA mechanics exams, you must work for a specified
period of time as an apprentice with an airline, or take an aircraft mechanics course
at an FAA-certified technical school. The FAA mandates that such programs be at
least 2,000 hours long.

This is one area where certain former military personnel may have a jump on their
civilian counterparts. Depending on their military training, many people can have a
portion of their training waived prior to taking the FAA exam.

As an A&P manager says:

One area where a lot of people get experience is through the military. Also, a lot of
people start off with smaller carriers. Wages there aren't real high but it's a starting
ground for developing the experience.

Getting FAA certification is not a step you can skip if you expect to land a job as an
airframe and powerplant mechanic. In the words of an instructor at an aviation
education program:

That certification is the ticket to getting a job. Without that ticket they don't even
look at you. Programs like this are the easiest way to get it.

Training at a school can be expensive, but well worth the expense, considering that
a lead airline mechanic with the required certificates can make over $40,000 per
year. It's also a sure way to get hired.

As a veteran A&P mechanic who is involved in hiring says:

Because of the way the industry is right now it's sometimes difficult to find those
with the experience we're looking for. So in place of that we look for a good attitude
- driven individuals who presents themselves well and has self-confidence. The
advice that I would give is not to expect to land a job with a major airline right off
the bat. You'll probably need to spend a few years in general aviation.

For example, in 1Q08, United attributed an average of nearly 60% of total operating
expenses to fuel. Given the extreme volatility of jet fuel, the airline industry must
increase its focus on cutting costs as it operates under historically low margins.