Industrial relations in the airline sector

  • Observatory: EurWORK
  • Topic:
  • Date of Publication: 28 September 2005

Andrea Broughton

The European airline sector has experienced a significant level of upheaval and change over the past two decades, mainly due to liberalisation and the subsequent emergence of new low-cost airlines. This has had a considerable impact on employment and industrial relations in the industry. This comparative study looks at: the recent development of the airline industry; employment; the situation of national carriers; the main trade union and employers' organisations; the structure and content of collective bargaining; and the impact of low-cost airlines on industrial relations.

This comparative study examines industrial relations in the airline sector in 17 European Union (EU) Member States (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Netherlands, Poland, Slovakia, Slovenia, Spain, Sweden and the UK), plus Norway. The study is based mainly on contributions from the European Industrial Relations Observatory (EIRO) national centres in the countries concerned. It provides an overview of the sector, the main trade union and employers' organisations, the collective bargaining structures, issues surrounding restructuring, and the impact of low-cost airlines on the sector as a whole.


The European airline sector has growth fast over the past 20 years. According to the European Commission, in terms of 'passenger-kilometres', traffic increased by an average of  7.4% a year between 1980 and 2001, while traffic at the airports of the old 15 EU Member States has increased five-fold since 1970. The Commission describes this rate of growth as 'impressive'. The civil aviation sector can be divided into three sections:

  • the 'full-service' sector, which includes national carriers and also other airlines such as Air Europa, Hapag Lloyd, BMI British Midland and Spanair;
  • the 'low-cost' sector, such as Ryanair and easyJet; and
  • the tour operator sector, which includes groups such as MyTravel and Thomas Cook.

The most recent figures from the European Commission refer to 2003 [DG Tren - Analysis of the European air transport industry 2003, published in January 2005] and indicate that airline traffic increased further in 2003 (after a decline in the spring of that year, attributed to the war in Iraq), particularly due to the growth of low-cost and regional airlines. However, full-service and charter airlines lost passengers during 2003. In financial terms, full-service airlines and tour operators posted overall losses, after a return to profitability in 2002, and the low-cost sector experienced a marked decline in its profits.

The airline sector has also undergone a significant upheaval over the past two decades, due to factors such as:

  • progressive liberalisation, leading to the appearance of numerous low-cost airlines;
  • the severe economic downturn of the early 1990s, which exposed weaknesses such as overcapacity, low productivity, high costs and undercapitalisation;
  • the terrorist attacks of 2001, which dented confidence in air travel; and
  • the high price of fuel.

All these developments have had a major impact on industrial relations and employment in this sector.


Over the past two decades, the EU has been working to liberalise the European airline sector. There have been three main stages of liberalisation:

  • the first package of liberalisation measures was adopted in December 1987, limiting the right of national governments to object to the introduction of new fares. Further, flexibility was introduced to enable airlines in two countries that had signed a bilateral agreement to share seating capacity;
  • a second package was adopted in June 1990, allowing greater flexibility over the setting of fares and capacity-sharing; and
  • the final stage was adopted in July 1992 and came into force in January 1993 (EU Regulations 2407/92, 2408/92 and 2409/92 of 23 July 1992). This gradually introduced the freedom to provide services within the Union and by 1997 airlines from one Member State had the right to operate a route within another Member State ('cabotage'). The EU airline market is now open to all airlines that hold a Community air carrier’s licence (companies can apply for this if most of their capital is held by Member States or nationals of the EU). Since April 1997, all airlines in the EU have unconditional access to all domestic markets.

However, governments may maintain services on some routes considered essential for harmonious development within their territory. They can do this by publishing the public service obligations that will be imposed on a carrier on a particular route (in terms of capacity, flight frequency and fares). If no carrier is prepared to provide a service, the Member State may restrict access to the route to a single carrier and grant that carrier financial compensation for compliance with these public service obligations.

The Commission is reviewing these measures and in March 2003 launched a consultation exercise on this issue, receiving replies from interested parties by 30 September 2003. In total, the Commission received 56 replies and is now considering the next step.

Controls on state aid

The airline industry suffered particularly badly from the economic downturn at the beginning of the 1990s, which forced many airlines to restructure. Most airlines turned to their governments for state aid to help them restructure successfully.

The European Commission’s approach to state aid was to ensure that it genuinely met a need for restructuring, without distorting competition on the market. In 1994, it set out the principles and criteria for evaluation of state aid for airlines, in the form of guidelines. Under the guidelines, state aid may be approved by the Commission, subject to a number of conditions, as follows:

  • it must form part of a comprehensive restructuring programme of limited duration to restore the airline's health and long-term viability;
  • the restructuring programme must be self-contained, requiring no further aid for the duration of the programme or in the future. The aid may be granted only once;
  • the programme must include capacity reductions, if necessary in order to restore the company to financial and commercial viability;
  • the programme must not lead to any increase in the number of aircraft or seats; and
  • governments must not interfere in the management of the company, which must be run according to commercial principles.

Since 1991, seven airlines have received state aid for restructuring: Sabena (Belgium), Iberia (Spain), Aer Lingus (Ireland), TAP (Portugal), Air France (France), Olympic Airways (Greece) and Alitalia (Italy). Most recently, the Commission approved, on 7 June 2005, a package of state aid for Alitalia worth more than EUR 1.2 billion as part of a restructuring plan aimed at restoring viability to the airline. This aid package had been criticised by other airlines and representatives of low-cost airlines (the European Low Fares Airline Association, ELFAA), which claimed that Alitalia was a 'terminally ill' national airline that no private investor would put money into. The low-cost airline Ryanair criticised the Commission’s approval of the aid, stating that it made a mockery of the 'one time, last time' principle that the Commission is supposed to apply to state aid (see above). In 1997, the Italian government received approval from the Commission for EUR 1.4 billion of state aid to Alitalia.

However, Jacques Barrot, the EU transport Commissioner, defended the Commission’s decision, telling the Financial Times that: 'This is in no way a political decision or a way of somehow helping Italy. There are those who say that we should be killing such a company, but I am only willing to kill it if there are legal reasons to do so - and there were not' (8 June 2005).

Results of liberalisation

Overall, the Commission believes that the liberalisation process has achieved the desired result. It states that the number of scheduled airlines established in the European Economic Area has increased steadily, from 77 in 1992 to 140 in 2002. It believes that this increase is a clear sign of the dynamic nature of the sector. Also, the number of routes between different EU Member States has increased by around 30% since 1993 (DG Tren - Analysis of the European air transport industry 2002, Final report, December 2003).

Most significantly, liberalisation has resulted in the growth of so-called low-cost or no-frills airlines, which offer cheaper flights to passengers in return for a simpler service and/or the use of secondary airports. By the end of 2002, these low-cost carriers accounted for around 12% of all intra-EU capacity - the vast majority of them were operating either to or from the UK or within the UK.

Overview of employment and industrial relations implications

In terms of employment, the airline sector has seen a considerable amount of restructuring and change over the past 15 years. Net employment levels increased from 435,400 in 1988 to 489,700 by 1996 (The European airline industry: from single market to world-wide challenges, European Commission Communication, 1999), although employment growth among national flag carriers was minimal (0.04%) (see table 3 below for the most recent figures). New forms of work, aimed at increasing flexibility, have spread around the sector.

In industrial relations terms, the challenge for trade unions has been twofold (as we we will explore in more detail below). In the case of traditional carriers, unions have been concentrating on negotiating acceptable terms and conditions for their members in those carriers undergoing restructuring. Nevertheless, many carriers have modified terms and conditions of employment for new employees, for example, employing new recruits on fixed-term contracts or operating a two-tier pay system. The practice of subcontracting has also increased, particularly in the case of ground handling and catering operations. With regard to the new low-cost airlines, trade unions have been trying to recruit new members and gain recognition for bargaining purposes. However, they have faced hostility on occasion, for example from the Irish-based carrier Ryanair, which does not recognise trade unions.

The European airline industry in detail

In terms of sectoral classification, for the the purposes of this study the airline industry corresponds to NACE code 62 (air transport) and 63.1 (cargo handling and storage). The employees covered are those employed by airlines as cabin crew, ground staff (including check-in staff and baggage handlers) and pilots. This study does not cover those people working in other capacities at airports, such as those employed by retail outlets.

Main airlines

One of the main developments in the EU’s airline industry over the past two decades has been the end of the monopoly position of national carriers. Most countries now have a range of airlines in addition to their national carrier. These new airlines compete with national carriers, often offering cheaper fares to passengers. A list of the main airlines operating in the countries covered by this study is provided in table 1 below.

Table 1. Main airlines operating in 18 European countries
Country Main airlines operating nationally (no. of employees, where available)
Austria Austrian Airlines Group (AUA) (7,050 employees on a full-time basis), comprising Austrian (formerly Austrian Airlines), Lauda Air, Austrian Arrows (formerly Tyrolean Airways) and Rheintalflug. NIKI Luftfahrt (150 employees). Air Alps (157 employees).
Belgium Delta Air Transport (DAT) (2,164 employees) (originally owned by the national airline Sabena SA, which was declared bankrupt in 2001) . European Air Transport (EAT) (582 employees), owned by the express delivery firm DHL. Virgin Express (formerlyEuroBelgianAirlines) (724 employees). Thomas Cook Airlines Belgium (263 employees). VLM Airlines (367 employees). TUI Airlines Belgium (200 employees). TNT Airways (330 employees).
Denmark SAS Denmark (2,700 employees). Maersk Air (1,200 employees). Cimber Air (384 employees). Sun Air (180 employees).
Finland Finnair (9,500 employees). Blue1 (510 employees). Air Finland (150 employees). Finnish Commuter Airlines (Finncomm) (120 employees). Aero Airlines.
France Air France (57,016 employees). Corsair (1,851 employees). Regional Airlines (1,665 employees). Brit’Air (1,149 employees). Air Littoral (448 employees). CCM Airlines (600 employees). Dassault Falcon Service (555 employees). Star Airlines (559 employees). Airlinair (170 employees). Air Calédonie (230 employees). Air Calédonie International (295 employees). Europe Airposte (293 employees). Euralair Horizons (258 employees). Heli Union (141 employees). Occitania Air Atlantique (89 employees).
Germany Deutsche Lufthansa AG (90,673 employees). LTU Lufttransport Unternehmen GmbH (2,610 employees). Air Berlin (2,164 employees). Condor Flugdienst GmbH (2,150 employees). Hapag Lloyd Flug (2,000 employees). Eurowings Luftverkehrs AG (1,686 employees).
Greece Olympic Airlines (7,900 employees). Aegean Airlines (1,300 employees).
Hungary MALÉV (3,045 employees)
Ireland Aer Lingus (4,300 employees). Ryanair (2,600 employees).
Italy Alitalia (20,575 employees). Air One (1,062 employees). Meridiana (1,361 employees).
Netherlands KLM (25,500 employees). Martinair (3,400 employees). Transavia (2,500 employees). Dutch Bird (500 employees).
Norway SAS Braathens (2,954 employees). Widerøe (SAS affiliate). Norwegian Air Shuttle (450 employees).
Poland LOT Polish Airlines (3,789 employees).
Slovakia Slovak Airlines (140 employees). Air Slovakia BWJ (91 employees). Sky Europe Airlines (432 employees).
Slovenia Adria Airways (552 employees).
Spain Iberia (26,200 employees). Spanair (controlled by SAS) (2,900 employees). Air Europa (2,200 employees). Air Nostrum (1,700 employees). Futura (670 employees).
Sweden SAS Sweden (2,800 employees).
UK British Airways (52,000 employees). Virgin Atlantic. British Midland (4,000 employees). easyJet (3,000 employees).

Source: EIRO.

Situation of national carriers

The national carriers of individual countries have fared differently over the past two decades, with some managing to retain their grip on the market, despite the emergence of competition, while others have floundered. Virtually all national carriers have been through some type of restructuring and/or privatisation process over the past two decades.

Success stories include the German national carrier, Lufthansa, which is by far the country’s largest airline. It is now privatised, a process that began in 1994 and took three years. In Hungary, the national airline MALÉV celebrated its 50th anniversary in 2004. Likewise, the Dutch KLM is by far the largest airline in the Netherlands, employing over 25,000 workers. The French national carrier Air France has undergone a privatisation process, but is reported to have managed not to make redundancies as a result - in fact, it has carried on recruiting. These two airlines merged in 2004, creating Air France-KLM, although the two airlines continue to operate separately (see below for details).

Ireland's Aer Lingus posted the strongest growth of any national carrier in 2003, following a decision to reposition itself as a low-fares airline, largely as a response to the operations of the low-cost Ryanair (see below under 'Impact of low-cost airlines').

British Airways (BA) was privatised in 1987. It remains the UK’s largest airline and has restructured itself extensively over the past few years. Restructuring has been most pronounced in its European operations, where it operates a divisionalised structure with new terms and conditions for each subsidiary and 'benchmark' or market rates for these companies being set by other low cost carriers within Europe. BA has also detached various services from the core business, choosing to maintain control through leasing or franchising arrangements. It has also pioneered franchise agreements with several airlines and outsourced activities such as catering and vehicle management and maintenance. If other services are provided in-house, they must now be cost-competitive against low-cost service providers.

In Spain, Iberia faced competition dating from the liberalisation of the sector in 1985 and competition in terms of handling from 1995. However, it is still the largest company in the sector.

By contrast, the most spectacular example of the failure of a national carrier is that of the Belgian Sabena, which filed for bankruptcy in 2001. This caused a 0.65% decline in Belgian GDP in 2001 and led to the loss of between 8,000 and 14,000 jobs (depending on the source). Some commentators characterise this as the biggest economic and social disaster in Belgium for at least a quarter of a century.

The Italian national carrier Alitalia has been having severe financial problems in recent years. It made an operating loss of EUR 412 million in 2004, up from a loss of EUR 384 million in 2003. Its net debt in April 2005 was reported to be EUR 1.83 billion. In an effort to turn the company around financially, a rescue plan was agreed by Alitalia management and trade unions in September 2004 (IT0410104F). Under the plan, Alitalia will divide its air and ground services into two separate companies, AZ Fly and AZ Services. It was also agreed that 3,700 jobs would be cut at the airline, less than the number originally envisaged, following talks with trade unions (see below under 'Restructuring').

The French national carrier Air France and the Dutch national carrier KLM Royal Dutch Airlines merged on 5 May 2004. The two airlines are owned by a Paris-based joint holding company, Air France-KLM. Air France, which is 54% owned by the French government, took over KLM, acquiring 80% of KLM shares. Air France-KLM owns 100% of Air France but only 49% of KLM for the three years following the merger. KLM owns around 19% of the new company. However, the two airlines continue to operate as separate companies out of their bases in Paris and Amsterdam. They have established this complicated structure rather than a full-scale integration of the two airlines in order to safeguard KLM’s international traffic rights under its 1992 agreement with the US aviation industry. Under current rules governing covering routes and landing rights for national carriers, ownership and control must be the same nationality as the aircraft’s flag or registration. At the time of the merger, Air France-KLM was the world’s leading airline in terms of revenue (EUR 19.2 billion for 2002/3) and the third airline worldwide in terms of revenue per passenger/kilometre. Its first full-year profits, announced in May 2005, rose by 20%, to EUR 351 million.

Global strategic alliances

Strategic alliances are now a feature of the airline industry worldwide. There are at present four main alliances - see table 2 below - each with one or more of the main airlines from the North American, European and Asian regions. The alliances have 'code-share' arrangements that enable them to develop networks without having to operate more flights. Schedules are often streamlined to facilitate connections between the partners in an alliance and therefore shorten travel time.

Table 2. Main global strategic airline alliances
Alliance Members
Star Alliance Air Canada, Air New Zealand, ANA, Asiana Airlines, Austrian Airlines, BMI, LOT Polish Airlines, Lufthansa, Scandinavian Airlines, Singapore Airlines, Spanair, TAP, Thai Airways InternationalUnited, US Airways and VARIG
Oneworld and associates American Airlines, British Airways, Qantas, Cathay Pacific Airways, Iberia, LAN, Finnair and Aer Lingus
SkyTeam Alliance Alitalia, Air France-KLM, Delta Airlines, AeroMexico, Korean Air, CSA Czech Airlines, Northwest and Continental

Source: European Commission, own research.

Trade unions, coordinated by the International Transport Workers' Federation (ITF), have responded to the development of global airline alliances by organising their own alliances of unions organising in the airlines concerned. Their work includes holding meetings, collecting comparative information on employment conditions within each alliance, and developing proposals for codes of conduct.

Employment in the airline sector

Employment status of the workforce

There are a range of approaches to the employment of staff in the airline sector. In some airlines, ground staff are employed directly. This is the case in many of the national carriers. In others, check-in and cargo-baggage handling positions are subcontracted. For example, this is predominantly the case in Belgium, where airlines use either Aviapartner Belgium, which has 1,600 employees and specialises in passenger and baggage handling, ticketing, cargo and mail handling, ramp services, aircraft servicing and maintenance, catering and surface transport of passengers and crew; or Belgian Ground Services, which has 1,400 employees and provides check-in, ticketing and boarding services, baggage handling, ramp services and aircraft cleaning at Brussels airport. In Hungary, Budapest Airport Corporation and HungaroControl employ 1,500 and 700 staff respectively to perform similar tasks.

In Spain, the national carrier Iberia has in the past made attempts to outsource auxiliary functions to external organisations, but trade unions have opposed this and the moves have been blocked by the courts.

Employment levels

Employment levels have been falling in some areas of the industry, while rising in others, reflecting the transformations affecting the sector. For example, in France, where a plethora of airlines exist (see table 1 above), overall employment in French airlines fell by 2% between 2002 and 2003, but employment rose in the national carrier Air France by 1%. See table 3 for the most recent figures on employment levels.

According to the Association of European Airlines (AEA), its 30 member airlines had a total of 339,000 employees in 2004, compared with 360,000 in 2003 (31 members) and 358,000 in 2002 (30 members).

Table 3. Employment levels in the airline industry and/or major airlines, by country (latest available data)
Country Employment level
Austria 12,200 (December 2004)
Belgium 12,068 (2002, NACE codes 62 and 63.1)
Denmark 10,573 (2004, NACE code 62)
Finland 13,789 (2003, NACE codes 62 and 63.1)
France 65,319 (December 2003, cabin crew and ground staff in French-based airlines)
Germany 29,211 (June 2003, NACE code 62) and 80,699 (June 2003, NACE code 63.1)
Greece 11,111 (2001, NACE code 62) and 9,231 (2001, NACE code 63.1)
Hungary 3,045 (end 2004, MALÉV employees)
Ireland 6,900 (approximate figures for Aer Lingus and Ryanair staff)
Netherlands 31,900 (approximate figures for KLM, Martinair, Transavia and Dutch Bird staff)
Norway 12,147 (2003, NACE codes 62 and 63.1)
Poland 3,789 (2003, LOT employees)
Slovakia 2,020 (2004)
Slovenia 986 (employees of airlines operating in Slovenia and its three airports).
Spain 42,700
Sweden Circa 20,000 altogether in airlines, airport companies, air forwarding agents, flight schools, catering and aircraft maintenance (end 2004 figures from the Swedish Air Transport Industry Employers’ Association [HAO Flygbranschens arbetsgivareförbund, HAO Flyget]). 9,478 employees of airlines with permission to fly for business purposes (2004 figure from the National Institute of Communication Analysis, SIKA).
UK 83,000 (April 2005, NACE code 62) and 288,200 (April 2005, NACE code 63, excluding 63.3)

Source: EIRO

Type of employment contract

It would appear that the majority of employees in the airline sector work full time. In France, for example, 70% of employees worked on a full-time basis in 2002. At the Hungarian national carrier MALÉV, the vast majority of employees (2,878 out of 3,045) work on a full-time basis. In Slovakia, it is reported that around 95% of employees in the sector work on full-time and open-ended contracts. This is also the case in Austria, although part-time work is more prevalent among flight attendants and there is also some fixed-term employment in small airlines, linked to seasonal business. At KLM in the Netherlands, the majority of the airline’s 22,148 employees work on full-time, open-ended contracts, although 462 have a fixed-term contract and 917 are employed on a temporary basis

By contrast, fixed-term contracts are widely used by the Greek Olympic Airlines, a practice that increases during the summer months. In Finland, it is reported to be common practice to offer cabin crew fixed-term contracts at the start of their career. In Hungary, fixed-term contracts tend to be linked to seasonal work during the summer.

Gender balance

Statistics on the gender balance of the workforce are not available for all countries. However, the general pattern would appear to be one of high gender segregation according to occupation: pilots, manual workers and baggage handlers are predominantly male; while flight attendants and ground staff are predominantly female.

At MALÉV, for example, around 55% of employees are women, although only four pilots are female (compared with 300 male pilots), while the great majority of administrative staff and flight attendants are female. Further, the majority of those working in engineering, ground-handling, refuelling and cargo service are male. Similarly, at the Dutch KLM, two-thirds of the air crew and the ground crew is female, while the cockpit crew is almost exclusively male.

In Germany, women make up just under half of the total employees in the scheduled air transport sector and 40.5% of employees in Lufthansa, of which the vast majority (around 83%) of part-time employees in the sector. There are no women on Lufthansa’s executive board, although women make up 13.3% of the airline’s leading managers. In France, almost 30,000 women were reported to work in air transport companies in 2003, compared with around 42,500 men. In Denmark, out of the 10,573 employees working in the airline sector in 2004 under NACE code 62, two-thirds (6,615) were male.

Social partners

Trade unions

Most countries have a range of different trade unions representing staff in the airline industry, due to the diversity of functions in this sector. Different unions often organise cabin crew, pilots, ground staff, administrative staff and manual staff. For example, in Poland there are seven unions operating within the airline sector, most representing a specific vocational group. Similarly, in Norway, a myriad of trade unions exist, some affiliated to the three large confederations and some operating independently. Further, some are occupationally based while others organise a range of different occupations and groups of workers. In Denmark, a range of trade unions operate in the sector, mainly under the umbrella of the Danish Confederation of Trade Unions (Landsorganisationen i Danmark, LO) or the Confederation of Salaried Employees and Civil Servants in Denmark (Funktionærernes og Tjenestemændenes Fællesråd, FTF). Some groups of workers in Denmark are represented by more than one union (for example pilots and cabin crew) depending on which company they work for - SAS and Maersk Air operate their own unions for pilots and cabin crew.

In many cases, general trade unions, such as white-collar unions, represent airline industry workers as well as workers in other industries. For example, in Germany, the United Services Union (Vereinte Dienstleistungsgewerkschaft, ver.di) is a general service sector union, but organises ground staff. It is also aiming to organise cabin crew and pilots.

Most countries have a separate and often independent trade union for pilots, reflecting the specific nature of the profession. At SAS, for example, dedicated pilots’ unions exist for pilots in Denmark, Norway and Sweden, although they bargain together with SAS management for a single agreement covering all SAS pilots. The Danish pilots’ union is for SAS pilots only. Other specialist and technical occupations have independent unions in a number of countries.

Details of the wide range of specialised and general trade unions operating in the airline sector are provided in table 4 below.

Trade union density

Trade union density is in general relatively high in the airline sector as a whole - certainly higher than the national average - and particularly so in the case of pilots, where density rates can approach 100%. Similarly, rates of over 90% are not uncommon in the case of cabin crew. In many countries, the airline sector has a history of high levels of unionisation, reflecting the previous public status of the national carriers. One exception appears to be Slovakia, where average union density in the airline sector is estimated to be around 36%, as many airlines are non-unionised.

Density is generally high in the national carriers, most of which have been or are in the process of being privatised. The picture in the case of new, low-cost airlines is mixed. The most well-known case of an 'anti-union' company is the Irish-headquartered Ryanair, which operates budget flights all around Europe. Ryanair has been described by commentators as 'vehemently non-union' and, although some of its employees are union members, Ryanair has refused to grant formal recognition rights to trade unions on several occasions (see below under 'The growth of Ryanair'). At present, there is a dispute between Ryanair and the Irish Airline Pilots Association over recognition, under Ireland's Industrial Relations (Amendment) Act 2001. The outcome of this case is keenly awaited by observers in Ireland, as it is likely to have substantial implications beyond Ryanair.

Similarly, there are also recognition difficulties reported at the Greek carrier Aegean Airlines (originally established under a different name in 1987). In Poland, employees of LOT’s fledgling low-cost carrier, Centralwings, are not organised by trade unions. Indeed, those employees transferring from LOT to Centralwings have reportedly been obliged to forego trade union protection.

Lack of union recognition can also be the result of a lack of union membership rather than any particularly hostile attitude on the part of the company. This appears to be the case at Dutch Bird, where there is no collective agreement, primarily because there are hardly any union members at the company.

In Denmark, where union density in this sector is traditionally high, smaller companies have emerged that are not covered by a collective agreement because the employer is not a member of an employers' organisation and union density among the workforce is low. By contrast, in Belgium it is reported that trade union recognition in low-cost carriers is unproblematic - for example, a trade union delegation was set up at Virgin Express in 2000. In the UK also, unions tend to be recognised, including by the low-cost carriers, although BMI was reportedly accused of anti-union activity when it restructured its cabin crew. Further, there have been protracted, but ultimately successful, recognition negotiations at easyJet (following its purchase of BA’s low-cost subsidiary Go) with the Transport and General Workers' Union (TGWU). In Norway, the airlines (SAS Braathens, Widerøe and Norwegian), including low-cost ones, recognise trade unions and have collective agreements.

Overall, it seems that although the airline sector has traditionally had relatively high rates of trade union density, the emergence of Ryanair, which at present employs 2,600 staff, could make inroads into union density in this sector across Europe.

Employers' organisations

A number of countries examined do not have a dedicated sectoral employers' organisation for the airline industry. This the case in the UK, the Netherlands, Poland, Ireland, Finland, Hungary and Germany. In such cases, airlines may belong to general or wider transport employers' organisations. In Finland, the absence of an employers' organisation is due to the dominance of the national carrier Finnair, which belongs directly to the Confederation of Finnish Industries (Elinkeinoelämän keskusliitto, ESK). In Ireland, Aer Lingus and Ryanair conduct their own negotiations (with trade unions in the case of Aer Lingus) and representation, while in Germany, Lufthansa bargains directly with the trade unions.

Where there are employers' organisations, they tend to be more centralised than the trade unions, often with one main organisation. This is the case in Sweden, where the employers' organisation for the sector negotiates around 10 national sectoral agreements with trade unions. In France, too, the main employers' organisation for this sector has a membership of more than 200 firms. In Denmark, the Confederation of Danish Industries (Dansk Industri, DI) represents the country’s two largest airlines - SAS and Maersk Air. It also represents international airlines with a small base in Denmark, such as British Airways, Lufthansa Cargo and Thai Air. In Spain, there are two main employers' organisations for the airline sector, following a split in the previous single main organisation. There are also two main employer organisations operating in this sector in Slovenia, Italy and Belgium.

Details of employers' organisations by country in the airline sector are provided in table 4 below.

Table 4. Main trade unions and employers’ organisations in the airline sector, by country
Country Trade unions Employers’ organisations
Austria The Union of White-collar Workers in the Private Sector (Gewerkschaft der Privatangestellten, GPA) covers ground staff and administrative staff. The Union of Blue-Collar Workers in Commerce and Transport (Gewerkschaft Handel, Transport, Verkehr, HTV) covers other blue- and white-collar workers and has the exclusive right to organise flight staff. Federal Organisation of Aviation Companies (Fachverband der Luftfahrtunternehmungen, FL) - part of the Chamber of the Economy (Wirtschaftskammer Österreich, WKÖ).
Belgium Airline staff are represented by more general unions affiliated to the two largest confederations - the Public Services Christian Union (Centrale Chrétienne des Services Publics/Christelijke Centrale van de Openbare Diensten, CCSP/CCOD) and Belgian Union of White-Collar Staff, Technicians and Managers (Syndicat des Employés, Techniciens et Cadres de Belgique, SETCa) - and by the Federation of Liberal Trade Unions of Belgium (Centrale Générale des Syndicats Libéraux de Belgique/Algemene Centrale der Liberale Vakbonden van België, CGSLB/ACLVB). The Belgian Cockpit Association (BeCA) is a professional union for pilots and flight engineers. Belgian Air Transport Association (BATA) and Federation of Airline Company Representatives in Belgium (Union Professionnelle des Représentants des Compagnies Aériennes en Belgique, BAR).
Denmark The Union of Airline Staff (Flyvebranchens Personale Union, FPU) is an umbrella body for nine unions representing cockpit and cabin staff at most airlines in Denmark except SAS and Maersk Air. General Aviation (GA) is a union for staff of small airline companies. The Danish Airline Pilots’ Union (Dansk Pilotforening, DPF) represents SAS pilots only (cooperating with similar Norwegian and Swedish unions). The SAS Cabin Attendants' Union (Kabineforeningen for Cabin Attendants i SAS, CAU) represents cabin crew at SAS. The Maersk Air Pilot Association (Maersk Air Pilotforening, MAP) organises pilots at Maersk Air only. The Maersk Air Cabin Union (Maersk Air Kabine)represents cabin crew at Maersk, plus some at SAS and Premiair. The Danish Union of Salaried Employees in SAS (Luftfartsfunktionærerne, LFF) organises the airline's white-collar ground staff (the largest group of employees at SAS), including check-in staff and ticket sales staff. The Danish Metal Workers’ Union (Dansk Metal) represents flight mechanics and engineering workers. The Danish Union of Electricians (Dansk El-Forbund, DEF) represents electricians and technicians. The United Federation of Danish Workers (Fagligt Fælles Forbund, 3F) organises cargo and baggage handlers. The Union of Commercial and Clerical Employees (Handels og Kontorfunktionærernes Forbund, HK) represents some white-collar employees. The Organisation of Managerial and Executive Staff (Ledernes Hovedorganisation, LH) represents managers and executives (it does not sign collective agreements and members sign individual contracts with SAS and Maersk Air). The Confederation of Danish Industries (Dansk Industri, DI), of which the country's two largest airlines are members - SAS and Maersk Air. DI also represents international airlines with a (normally small) base in Denmark, such as British Airways, Lufthansa Cargo and Thai Air.
Finland The Finnish Cabin Crew Union (Suomen Lentoemäntä- ja Stuerttiyhdistys, SLSY) represents cabin crew. The Finnish Air Line Pilots’ Association (Suomen Liikennelentäjäliitto) represents pilots. The Finnish Ground Staff Union (Finnairin tekniset) and the Aviation Union (Ilmailualan Unioni) represent ground staff. There is no specific employers’ association in the airline industry, due to the dominance of the national carrier Finnair. However, Finnair, Blue1 and Air Finland are members of Association of the Support Service Industries (Palvelualojen toimialaliitto), affiliated to the Confederation of Finnish Industries (Elinkeinoelämän keskusliitto, EK).
France Ground staff are represented by the transport industry federations of the five union confederations with representative status at national level - while other unions, such as Sud aérien, the National Federation of Independent Unions (Union nationale des syndicats autonomes, UNSA) and the National Union of Civil Aviation Ground-based Mechanics (Syndicat national des mécaniciens au sol de l’aviation civile, SNMESAC), also have representative status in some companies. The five transport federations also represent commercial cabin crew, as does the Union of Civil Aviation Cabin Crew (Union des navigants de l’aviation civile, UNAC). Technical cabin crew, including pilots, are represented by independent unions: the National Pilots’ Union (Syndicat National des Pilotes de ligne, SNPL); the Civil Aviation Pilots’ Union (Syndicat des pilotes de l’aviation civile, SPAC); the National Union of Civil Aviation Cabin Engineering Officers (Syndicat National des Officiers Mécaniciens Navigants de l'Aviation Civile, SNOMAC); UNAC; the National Union of Commercial Cabin Crew (Syndicat National du Personnel Navigant Commercial, SNPNC); the Air France Pilots’ Union (Syndicat des pilotes d’Air France, SPAF); and the National Union of Civil Aeronautics Cabin Crew (Syndicat National du Personnel Navigant de l'Aéronautique Civile, SNPNAC). The National Commercial Aviation Federation (Fédération nationale de l’aviation marchande, FNAM) has over 200 member firms, of which around 50 are involved in aeroplane or helicopter transport and another 50 work in the aviation industry. FNAM also acts as an umbrella group for employers and employers’ associations, including: the Air Transport Employers’ Association (Chambre syndicale du transport aérien), mainly organising air transport firms based in France; EBAA France, which represents the commercial aviation sector; the Stopover Support Service Employers’ Union (Chambre syndicale de l’assistance en escale), representing 18 companies; and the National Union of Helicopter Operators (Syndicat national des exploitants d’hélicoptères, SNEH). In addition, the Union of Independent Airlines (Syndicat des compagnies aériennes autonomes, SCARA) represents independent operators.
Germany The United Services Union (Vereinte Dienstleistungsgewerkschaft, ver.di) represents many ground staff, and also organises cabin crew and pilots.Vereinigung Cockpit (VC) is a specialist union for pilots. The Independent Organisation of Flight Attendants (Unabhängige Flugbegleiter Organisation, UFO) represents some flight attendants. A small breakaway group from UFO formed a new organisation for flight attendants - KabineKlar- in 2004. There is no employers' association in the airline sector. When Lufthansa was a publicly owned company, the Employers' Association of the Public Service in Hamburg (Arbeitsrechtliche Vereinigung Hamburg, AVH) represented its interests in collective bargaining for some ground staff, and some such collective agreements still exist .
Greece The Air Transport Staff Federation (OPAM) represents employees in foreign-based airlines and private Greek airlines and has nine member unions. The Federation of Civil Aviation Unions (OSPA) represents employees at Olympic Airlines and has 17 member unions, among them the Union of Flight Attendants and Stewards, the Union of Olympic Airways Employees, the Professional Union of Olympic Airways Scientific Staff, the Olympic Airways Association of Technical Scientific Staff and the Union of Olympic Airways Qualified Aircraft Engineers. There is no employers' association for Greek airlines. Olympic Airlines bargains directly with OPSA. The sectoral employers’ organisation for the foreign airlines sector is the Association of Foreign Airlines (EXAE).
Hungary The main unions in the airline sector are: the Hungarian Airline Pilots’ Association (Magyar Közforgalmi Pilóták Egyesülete, HUNALPA); the Association of Hungarian Flight Attendants (Magyar Légiutaskísérők Egyesülete, HUNACCA); the Independent Union of Air Transport Workers (Légiközlekedési Dolgozók Független Szakszervezete, LDFSZ); the Independent Union of Airplane Technical Staff (Repülőgép Műszakiak Független Szakszervezete, RMFSZ); and the Trade Union of Economic Experts (Gazdasági Szakemberek Szakszervezete, GSZSZ). The MALÉV Trade Union Organization (MALÉV Szakszervezeti Szervezet, MSZSZ) and Commercial Workers’ Union (Kereskedelmi Dolgozók Szakszervezete) are unions with a 'non-public status'- ie operating exclusively at MALÉV - but the latter is not active. There is no sectoral employers’ federation. The MALÉV group is a member of the Confederation of Hungarian Employers and Industrialists (Munkaadók és Gyáriparosok Országos Szövetsége, MGYOSZ).
Ireland The union representing the majority of Aer Lingus workers is the Services Industrial Professional and Industrial Union (SIPTU), which predominantly organises catering, cleaning, clerical, and operative staff. The other key union is the Irish Municipal Public and Civil Trade Union (IMPACT), which represents mainly cabin crew and pilots. Ryanair is a non-union company, although an unknown number of employees are union members. It has continually refused to grant formal recognition rights to trade unions, in the face of campaigns by SIPTU and IMPACT. There is no sectoral employers’ federation. Aer Lingus and Ryanair conduct their own negotiations and representations.
Italy The sectoral federations of the three largest union confederations - the Italian Federation of Transport (Federazione italiana trasporti, Fit), the Italian Federation of Transport Workers (Federazione italiana lavoratori trasporti, Filt) and the Union of Italian Transport Workers (Unione italiana lavoratori trasporti, Uiltrasporti) - represent the majority of workers in the sector. Some are members of Ugl Trasporti, affiliated to the General Workers’ Union (Unione generale del lavoro, Ugl) confederation. There are also a number of autonomous unions operating in the sector. The United Transport Workers Union (Sindacato unitario lavoratori dei trasporti, Sult) is the leading occupational union and others include: the Italian Commercial Aviation Pilots’ Association (Associazione Nazionale Piloti Aviazione Commerciale, Anpac); the Pilots’ Union (Unione Piloti, Up); the Technical of Flight Association (Associazione Tecnici di Volo, Atv); the Professional National Flight Attendants’ Association (Associazione nazionale professionale assistenti di volo, Anpav); the Italian Flight Attendants’ Union (Associazione sindacale degli assistenti di volo italiani, Avia); and the Professional Association Eurofly Pilots (Associazione professionale piloti Eurofly, Appe), created recently to represent pilots working for the Eurofly charter airline. The main employers’ organisations are the National Association of Operating Carriers and of the Aerial Transport (Associazione nazionale vettori e operatori del trasporto aereo, Assaereo) and the Italian Association of Airport Operators (Associazione Italiana Gestori Aeroporti, Assaeroporti).
Netherlands Employees in the airlines sector are generally represented by: Allied Unions (Bondgenoten) affiliated to the Federation of Dutch Trade Unions (Federatie Nederlandse Vakbeweging, FNV); Bedrijvenbond, affiliated to the Christian National Trade Union Federation (Christelijk Nationaal Vakverbond, CNV); and De Unie-Federation of Managerial and Staff Unions (Unie Middelbaar en Hoger Personeel, De Unie MHP). There are also four occupational unions: the Dutch Airline Pilots’ Association (Vereniging van Nederlandse Verkeervliegers, VNV); the Dutch Cabin Crew Union (Vakbond van Nederlands Cabinpersoneel, VNC); the Dutch Association of Ground Engineers (Nederlandse Vereniging van Luchtvaarttechnici, NVLT); and the Union of Higher KLM Staff (Vereniging van Hoger KLM Personeel, VHKP). All four occupational unions have a significant role at KLM, while two - VNV and VNC - are also of significance at Martinair and Transavia. There is no sectoral employers’ organisation. The three main airlines are members of the Confederation of Netherlands Industry and Employers (Vereniging Nederlandse Ondernemers-Nederlands Christelijk Werkgeversverbond, VNO-NCW), and its partner organisation, the Dutch General Association of Employers (Algemene Werkgevers Vereniging Nederland, AWVN).
Norway The Norwegian United Federation of Trade Unions (Fellesforbundet) and the the Joint Association of Private Employees (Privatansattes Fellesorganisasjon, Prifo) - affiliated to different confederations (LO and YS respectively) - organise flight mechanics, maintenance and support workers and baggage handlers. The independent Norwegian Union of Aircraft Engineers (Norsk Flytekniker Organisasjon, NFO) organises aircraft engineers. The independent Norwegian Society of Engineers (Norges Ingeniørorganisasjon, NITO) organises engineers. The independent Norwegian Airline Pilots Association (Norsk Flygerforbund, NF) organises pilots. Workers with management responsibilities are represented by the LO-affiliated Norwegian Engineers and Managers Association (Forbundet for Ledelse og teknikk, FLT) and the independent Norwegian Organisation for Managers and Supervisors (Lederne). White-collar workers are represented by the LO-affiliated Norwegian Union of Employees in Commerce and Offices (Handel og kontor, HK) and the independent Union of Aviation White-collar Staff (Luftfartens Funksjonærforening, LFF). The independent Norwegian Union of Helicopter Employees (Norsk Helikopteransattes Forbund, NHF) organises helicopter mechanics, maintenance and support workers and baggage handlers, as does the LO-affiliated Norwegian Oil and Petrochemical Workers’ Union (Norsk Olje- og Petrokjemisk Fagforbund, Nopef). The independent Norwegian Union of Cabin Crew (Norsk Kabinforening) organises cabin crew. Tekna (affiliated to Akademikerne) organises engineers. There are three employers' organisations operating in the airline sector: the Association of Norwegian Airlines (Flyselskapenes Landsforening, FL); the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO); and the Swedish Air Transport Industry Employers’ Association (Flygarbetsgivarna, FBA). FL is a member of NHO and is party to a large majority of agreements in all airline companies, though in some cases NHO is directly party to the agreements. In the case of SAS, FBA is party to two agreements, for pilots and cabin crew.
Poland The main unions in the sector are: the Independent and Self-Governing Trade Union Solidarity (Niezależny Samorządny Związek Zawodowy Solidarność, NSZZ); the Cabin Crew Trade Union (Związek Zawodowy Personelu Pokładowego, ZZPP); the Mechanics’ Trade Union (Związek Zawodowy Mechaników, ZZM); the Labour Confederation, affiliated to OPZZ (Ogólnopolski Pracowniczy Związek Zawodowy Konfederacja Pracy, OPZZ KP); the Airline Pilots’ Trade Union (Związek Zawodowy Pilotów Komunikacyjnych, ZZPK); the Transport Pilots’ Trade Union (Związek Zawodowy Pilotów Liniowych, ZZPL); and the Polish Airlines LOT Trade Union (Związek Zawodowy Polskich Linii Lotniczych, PLL LOT SA). There is no sectoral employers’ organisation. LOT negotiates directly with trade unions.
Slovakia Local trade union organisations at the country’s six airports and the Civil Aviation Authority are members of the Trade Union Association of Transport, Road Economy and the Car Repair Industry (Odborový zväz dopravy, cestného hospodárstva a autoopravárenstva). Employees in flight operational services are represented by three independent unions, representing air traffic controllers, technical staff and administrative staff. The Association of Employers in Transport, Post and Telecommunication SR (Zväz zamestnávateľov dopravy, pôšt a telekomunikácií Slovenskej republiky, ZZDPT SR) organises some airports and airlines.
Slovenia The main representative trade unions in the sector are: the Trade Union of Traffic Pilots (Sindikat prometnih pilotov), affiliated to the Pergam confederation; the Trade Union of Flight Attendants (Sindikat stevardes), affiliated to KNSS; the Trade Union of Dispatchers (Sindikat dispečerjev), affiliated to ZSSS; and the Trade Union of Flying-Technical Staff-Mechanics (Sindikat letalsko-tehničnega osebja- mehaniki). The employers’ associations in the sector are the Chamber of Commerce and Industry of Slovenia (Gospodarska zbornica Slovenije, GZS) and the Slovenian Employers' Association (Zdruzenje delodajalcev Slovenije, ZDS), through their relevant branch organisations. Eight airlines operating scheduled flights and 29 airlines operating unscheduled flights are members of GZS, while ZDS has only one member in the sector (Ljubljana airport).
Spain The general unions operating in the sector are the Federation of Transport and Communications (Federación de Transportes y Comunicaciones) of the Trade Union Confederation of Workers’ Commissions (Comisiones Obreras, CC.OO) and the Transport, Communications and Sea Federation (Federación de Transportes, Comunicaciones y Mar) of the General Workers’ Confederation (Unión General de Trabajadores, UGT). The independent Airline Pilots' Trade Union (Sindicato de Pilotos de Líneas Aéreas, SEPLA) has exclusive representation for this professional group. There are company-specific unions at Iberia for maintenance technicians, (Asociación Española de Técnicos de Mantenimiento de Aeronaves, ASETMA) and flight staff, (Sindicato Independiente de Tripulantes de Cabina de Pasajeros de Líneas Aéreas, SITCPLA). Two employers’ organisations operate in the sector: the Spanish Association of Air Companies (Asociación Española de Compañias Aéreas, AECA); and the Association of Airlines (Asociación de Líneas Aéreas, ALA).
Sweden Cabin crew are represented by the Salaried Employees’ Union (Sveriges Handelstjänstemannaförbund, HTF). Ground staff (loading workers and other blue-collar workers) are mostly organised by the Swedish Transport Workers’ Union (Svenska Transportarbetareförbundet, Transport). There are two pilots’ unions - (Pilotföreningen, SPF) and United Pilots of Scandinavia (Pilotförbundet). Catering workers are represented by the Hotel and Restaurant Workers’ Union (Hotel- och Restaurangarbetareförbundet). Managers are organised by the independent Swedish Association for Managerial and Professional Staff (Ledarna). Most Swedish airline companies are represented by the Swedish Air Transport Industry Employers’ Association (Flygarbetsgivarna, FBA), which bargains with trade unions.
UK The main trade unions in this sector are: the Transport and General Workers' Union (TGWU), the British Stewards and Stewardesses Association (an affiliate of the TGWU), the GMB general union; Amicus Cabin Crew (now an affiliate of Amicus, formerly the TGWU-affiliated Cabin Crew 89);Amicus; and the British Air Line Pilots’ Association, BALPA). There are no sectoral employers' organisations.

Source: EIRO.

Collective bargaining

European-level social dialogue

A European sectoral social dialogue committee for the civil aviation sector was created in 2000. It is made of members of: the European Transport Workers’ Federation (ETF) and the European Cockpit Association (ECA) for trade unions; and the Association of European Airlines (AEA), the Civil Air Navigation Services Organisation (CANSO), the European Regions Airline Association (ERA), Airports Council International (ACI) Europe and the International Air Carrier Association (IACA) for employers.

Joint texts concluded within the framework of this sectoral social dialogue include:

Structure of bargaining in individual countries

Collective bargaining structures in the airline industry are complex, due to the different types of employee groups working in this sector. Overall, there is an absence of sectoral negotiations in many countries, most likely due to the fact that in many cases the national airline dominates the sector and to the frequent absence of a sectoral employers’ organisation (see above).

Sectoral bargaining

Sectoral bargaining for the airline industry exists in some countries, although bargaining at this level often provides a floor for, or an accompanying level to, company-level bargaining. This is the case in Belgium, where bargaining takes place at both sector and company level. At sector level, the negotiating body is joint committee 315.02, covering all employees and employers in the commercial aviation sector. This committee signed 13 collective agreements in 2003 and three in 2004. These agreements aim to define a general framework that applies to all companies in the sector. However, ground crew are covered by joint committee 140.08 (blue-collar) and joint committee 226 (white-collar).

In France, there is a national air transport collective agreement for ground staff. The bargaining parties have recently addressed issues such as collective redundancies, severance payments, part-time work, night work and early retirement. There is, however, no sectoral agreement in France for technical and commercial cabin crew, despite a recent attempt to conclude such an accord.

In Sweden, bargaining in the airline sector follows the pattern set by the rest of the country, which is characterised by two levels. The first takes place at national sectoral level (SE0411101N) and the second takes place at the company level. Bargaining at the national carrier SAS is particularly complicated, with the company negotiating with a range of trade unions, representing different employee categories, although the airline has now been split along national lines (Sweden, Denmark and Norway), which may serve to clarify bargaining arrangements.

Company-level bargaining

Bargaining takes place predominantly at company level in many countries, reflecting the fact that national carriers dominate the industry, or have done until recently, in most countries.

This is the case in Germany, where Lufthansa bargains directly with ver.di and the VC pilots’ union. The result is a range of general framework collective agreements for Lufthansa ground staff, flight staff and apprentices (DE0104215N). The same is true in the case of Austria, where company-specific agreements exist only, in contrast to the practice of concluding multi-employer accords in other sectors. However, since October 2004, a single collective agreement for the AUA group has been in place. This had been a demand of the HTV transport workers’ union for some time, replacing the varying company-specific agreements within the group. The conclusion of this accord was preceded by industrial conflict (AT0408203F).

In Poland, LOT employees are covered by a single company-level collective agreement, whereas in the Netherlands, KLM employees are covered by three separate company-level accords, covering ground staff, cabin crew and pilots - though these agreements are concluded by the same bargaining parties simultaneously. In Spain also, employees of Iberia are covered by three different company-level agreements - for pilots, cabin crew and ground staff.

Bargaining is also highly decentralised in the Danish airline sector, with all negotiations of any importance taking place at company level. Although there is a sectoral agreement, the overall industry sector agreement, which covers ground staff members of trade unions operating in this sector if they are employed by SAS, Maersk Air and Cimber Air (which are all members of the DI), issues such as pay and working conditions are determined by direct negotiations between unions and airline managements.

In Italy, there is also no industry-wide agreement - the national-level contract for reference has always been the one applying to Alitalia employees, which is technically a company-level agreement.

In France, cabin crew employees of Air France are presently covered by five-year agreements governing working time, working conditions for flights and other activities, rest periods and tours. The agreements run until 2008.

Other countries where bargaining takes place at the company level for employees of the national carrier include Greece, Hungary, Ireland (within the framework of national-level social partnership agreements) and the UK, where bargaining is conducted by five national sectional panels, representing pilots, cabin crew, ground and support services, clerical grades and management. In Slovenia, an agreement covers the largest airline, Adria, while the collective agreement for the commercial sector applies to employees of other airlines operating in Slovenia, which are foreign-owned. However, the most important level of bargaining in Slovenia is deemed to be the company level.

Bargaining for pilots

Special mention should be made of collective bargaining for pilots, who often have their own trade union. For example, in Germany, the VC pilots’ union caused controversy in 2001 when it decided to bargain separately from the other unions with Lufthansa, seeking a pay increase of 35%. VC argued that Lufthansa pilots were lagging behind those of other airlines in terms of pay, despite the fact that they are performing an international job with commonly-recognised qualifications and regulations. The final agreement negotiated with Lufthansa contained increases worth at least 26% (DE0106226F).

As noted above, at SAS there are separate pilots’ unions for pilots in Denmark, Norway and Sweden, although they bargain together with SAS management for a single agreement covering all SAS pilots.

Social dialogue

In addition to collective bargaining over pay and working conditions, formalised social dialogue structures exist in the airline industry in some countries, predominantly the new EU Member States. For example, in Slovakia, tripartite negotiations take place, focusing on changes in legislation related to the airline industry. In Hungary, a sectoral social dialogue committee for the airline sector (Légiközlekedési Ágazati Párbeszéd Bizottság, LÁPB) has been set up, comprising representatives of five organisations on the employer side and 12 on the employee side.

Main bargaining issues

The predominant issues in terms of bargaining tend to be pay, holiday pay, working time and the organisation of working time (including rostering), pensions, sick pay, and severance and redundancy rights. The issue of 'block hours' (the time employees spend on board the aircraft) is also a subject for bargaining, as are flexible working time schedules.

Bargaining on restructuring

The topic of restructuring has been a very specific focus of debate in recent years, as many airlines have embarked upon large-scale restructuring exercises. For trade unions, the aim has been to secure employment and this has led to some concessions in the areas of pay and working time. For example, in the UK, there is a strong emphasis in the sector on linking pay to changes in working practices, in the context of ongoing restructuring.

Many countries have seen the restructuring of their national carriers in recent years. In Italy, a new agreement signed by management and unions in 2004 (IT0410104F) envisages the reorganisation and eventual privatisation of the national carrier Alitalia, concluding, it is hoped, a long series of negotiations and restructuring exercises dating from 1997 (IT0404304F, IT0205202F, IT0201178F and IT0203101N). The company will be split into two organisations - AZ Fly and AZ Services - and the restructuring will be accompanied by considerable job losses. In total, it is envisaged that 3,700 employees will be made redundant. The company also negotiated agreements with trade unions changing the employment conditions of pilots, flight attendants and ground staff. All measures were negotiated with trade unions. In February 2005, a further agreement was reached for flight attendants, reducing redundancy levels among this group of workers to zero, using methods such as incentives for early retirement, the introduction of a new remuneration system and a 'contribution of solidarity' on behalf of all workers (IT0504103N). The October 2004 agreement had originally envisaged 900 redundancies among flight attendants. Despite the job losses at Alitalia, it is hoped that this restructuring and cost-cutting plan will ensure the long-term financial viability of the airline. The European Commission approved the Italian government’s aid package to Alitalia in June 2005 (see above).

In the Netherlands, the national carrier KLM has achieved significant job reductions of 4,500 over two years, largely by not filling vacancies and by not renewing fixed-term and temporary contracts. In total, it made 300 permanent staff redundant, but offered them a year’s contract to enable them to find alternative employment outside the company.

In France, an ad hoc relocation task force was set up recently to help those made redundant by the bankruptcy of three small airlines - of Air Lib (FR0307103N), Aéris and Air Littoral - to find alternative work. As at March 2005, 77% of those registered with the task force had found work (although only 40% of pilots had been successful in finding alternative employment). National carrier Air France recruited many workers made redundant from Air Lib. At Air France itself, an agreement was concluded in 2003 as part of the airline’s privatisation process. It guarantees, until July 2005, no compulsory redundancies and the maintenance of individual accrued entitlements and working conditions, pay and collective accrued entitlements as set out in collective agreements.

Similarly, in Belgium, where the job losses resulting from the bankruptcy of the national carrier Sabena (BE0109362N, BE0108359F and BE0102340F) totalled at least 8,000 and may have been as high as 14,000 depending on the source, the government and trade unions agreed on a plan to help people find alternative employment. Measures offered included outplacement and the establishment of a new company that hired almost 2,500 ex-Sabena workers.

In Sweden, Norway and Denmark, SAS has experienced a high level of restructuring in recent years in an attempt to alleviate a financial crisis. This airline is 50% state-owned (Sweden has 40% of the public shares and Denmark and Norway 30% each). The company has negotiated pay freezes and working time amendments for staff in all three countries and in 2003 embarked upon a large-scale restructuring exercise involving 4,000 redundancies and pay freezes for all groups of employees (DK0304102F and SE0304104N). It also negotiated increases in working time with the various trade unions representing all employee groups. Other initiatives included relocating the SAS ticket-clearing operations from Denmark to India and negotiating cuts in pay for some groups of workers (DK0404102N, SE0402102F and DK0201124N. Trade unions were involved in the process of restructuring, but from a 'concession bargaining' position, with negotiations held in the shadow of plans for significant cost savings and threats of redundancy.

Restructuring has been the source of inevitable controversy in many countries. In Ireland, Aer Lingus rejected a Labour Court recommendation in August 2004, complaining that management arguments in the context of a case concerning the transfer of cabin crew were not given appropriate weight by the Court (IE0409201N). The Court had found in its recommendation that the airline has no absolute right to transfer cabin crew on a permanent basis against their will. Aer Lingus had argued that a current agreement gave it the right to move cabin crew from Shannon to Dublin airports.

Details of restructuring in individual countries are provided in table 5 below.

Table 5. Main recent restructuring exercises in the European airline industry
Country Restructuring exercise Involvement of trade unions Outcome
Austria Austrian took over Lauda Air and Tyrolean Airways in the late 1990s, to establish the Austrian Airlines Group (AUA). More restructuring planned, due to financial losses. Unions involved in establishing a single collective agreement for AUA. No significant redundancies from the takeover, but restructuring plans to stem AUA’s losses could involve workforce reductions. Resistance from trade unions (AT0309202F).
Belgium Bankruptcy of the national carrier Sabena in November 2001 Social elements of the restructuring plans negotiated with trade unions in accordance with the law. In the first plan, of the 1,400 redundancies originally envisaged, only 700 were implemented. Agreement reached between the government and trade unions on helping the workers made redundant following Sabena’s bankruptcy to find alternative work. Loss of up to 14,000 jobs. Final bankruptcy came after two restructuring plans, the first cutting 700 jobs and the second cutting 2,000
Denmark Restructuring at SAS Danish operations Trade unions were involved in the restructuring process, but from a 'concession bargaining' position. In return to agreeing to cost-saving measures, they have sought employment guarantees from SAS, which have so far only been partial. Increases in block hours for pilots and cabin crew, a pay freeze for all groups of workers, pay reductions for ground staff, cabin crew and pilots. Outsourcing of ticket clearance operations. Some redundancies.
Finland Restructuring at Finnair since 2001 to maintain competitiveness. The Finnish Cabin Crew Union (SLSY) was involved in the negotiations on restructuring (FI0203101N). Temporary lay-offs for cabin crew, an increase in the number of fixed-term contracts.
France Bankuptcy of Air Lib and Aéris in 2003, followed by closure of Air Littoral in February 2004. Serious conflicts with trade unions resulting from the bankruptcies of Air Lib, Aéris and Air Littoral. Where redundant airline employees have found work, trade unions are focusing on achieving recognition for their seniority and qualifications. 3,200 redundancies in Air Lib bankruptcy, 450 in Aéris bankruptcy, 444 in Air Littoral closure.
Privatisation of Air France in 2003, followed by the merger of Air France with KLM, effective from May 2004. Agreement in 2003 at Air France, guaranteeing until July 2005 no compulsory redundancies and maintenance of terms and conditions for existing staff. No notable redundancies at Air France, where jobs were safeguarded and the company carried on recruiting.
Germany Restructuring at Lufthansa in 2004 following privatisation. Involvement of trade unions on how to handle the consequences of restructuring and avoid redundancies. Pay freeze for ground staff, partly compensated for by one-off payments. Lowering of co-pilots’ pay. More working time flexibility. Establishment of a two-tier pay system, changes to bonus systems and holiday entitlement. In return, there will be no compulsory redundancies before 31 December 2006.
Greece Restructuring of national carrier Olympic Airways since the early 1990s to restore the company’s viability and eventually privatise it. Restructuring carried out in 2003 changed the company name to Olympic Airlines. Attempts to find a buyer for the airline continue. The 2003 restructuring plan caused considerable conflict and opposition from some trade unions (GR0401104F) Alterations to Olympic Airlines staff terms and conditions and labour relations in 2003.
Ireland Radical restructuring of the national carrier Aer Lingus since 2001 (IE0111101F, IE0210201N and IE0302201N). 2001 plan developed unilaterally by management, although details were negotiated locally with trade unions. The 2001 plan involved over 2,000 redundancies a wage freeze, changes in working practices and productivity improvements. A further plan was outlined in 2004, involving a further 1,350 job losses (IE0403202F).
Italy Restructuring of the loss-making national carrier Alitalia. A plan was drawn up in 2004 and should be implemented by 2008. Alitalia agreement negotiated and signed by management and trade unions. It is hoped that the 2004 Alitalia restructuring plan will lead to financial stability, operational reorganisation and privatisation. It will also involve significant workforce reductions (3,700, although 900 planned reductions among flight attendants will not be implemented, following the conclusion of a solidarity agreement in February 2005). Unions achieved a reduction in the original number of envisaged redundancies.
Bankruptcies of small and medium-sized domestic airlines, such as Panair, Minerva Airlines, Azzurra Air, Air Sicilia, Gandalf Airlines and Volare Airlines in 2004.
Netherlands Major restructuring at KLM in 2002-3 to cuts costs in the face of overcapacity. Involvement of the works council and trade unions. The works council was consulted on the restructuring proposals and the unions were involved in negotiating over the outcomes, where these had consequences for employees. Loss of 4,500 full-time equivalent jobs and savings of EUR 650 million. Job cuts achieved through not filling vacancies, not renewing fixed-term and temporary contracts and making around 300 permanent staff redundant. These employees were offered help to find alternative employment.
Norway Continuous restructuring since deregulation in the mid-1990s. Most recently, the merger of SAS and Braathens (NO0206106F). Employee representatives consulted in line with regulations on information and consultation. However, trade unions at Braathens felt let down by management and unions at SAS, as redundancies were implemented before the merger took place (NO0111125N). Significant workforce reductions (around 1,000 plus early retirements). Cuts in pay and concessions on terms and conditions.
Poland Restructuring plan at national carrier LOT that aims to cut costs, mainly by reducing the workforce by 2006. Unions are fighting the restructuring and cost-saving plans by initiating a collective dispute. Dispute ongoing, with industrial action not ruled out.
Spain Restructuring at the national carrier Iberia in 2001 and again in 2004. 2001 plan at Iberia negotiated with employee representatives (ES0112243F and ES0201247N). Redundancy of just over 2,500 workers at Iberia in 2001 - the number of redundancies was increased in 2004.
Workforce reductions at Air Europa and Spanair in 2001.
Attempted subcontracting by Iberia to new companies, blocked in the courts.
Sweden Restructuring over the past five years at SAS AB to cut costs. All 39 local trade unions are involved in negotiating the restructuring process, in accordance with Swedish legislation on employment protection and codetermination. 'Turnaround 2005' plan foresees 8,000 redundancies in Sweden, Denmark and Norway and pay freezes.
UK Major restructuring at the national carrier BA since the early 1990s (UK0004168F), including the introduction of a divisionalised structure for its European operations and leasing or franchising arrangements for some services. Most recently, a strategic review process was undertaken in November 2001 (UK0110114F). Measures contained in the 2001 strategic review were relayed to union officials, activists and other staff. However, this process was one of information and communication rather than consultation and negotiation. Unions representatives were not involved in the decision-making process. 7,000 job losses in 2001 and a further 13,000 by 2003. BA is now a profitable organisation after incurring severe losses between 1999 and 2000.

Source: EIRO.

Industrial conflict

The airline industry has experienced arguably more than its fair share of industrial conflict over the past two decades, due largely to the high volume of restructuring undertaken and continuing waves of change. In addition, high levels of trade union density and the complexity of the industrial relations structures in this sector increase the likelihood of industrial conflict and strikes. The sector is by no means stable in terms of industrial peace: in Italy alone, 61 national-level strikes in this sector were announced during the first quarter of 2005 (although only 19 of these actually took place).

In the UK, a significant dispute took place in 2003 at BA over the introduction of automated clocking for work start and finish times. The strike, which was unofficial, caused the diversion of around 500 flights and affected some 100,000 passengers (UK0308103F).

In France, the redundancies caused by the bankruptcy of three small airlines in 2003-4 provoked serious labour conflicts, which were supported by trade unions. In addition, a series of legal disputes were lodged, some of which are still being heard.

Legislation on strikes in essential public services, including air transport, which guarantees a minimum level of service, exist in countries such as Italy (IT0310101N). In France, the right to strike is an individual one, enshrined in the preamble to the Constitution, but there has been much recent debate about the right to strike in the transport sector (albeit focusing on the rail sector following much industrial action at the state-run French National Railways [Société nationale des chemins de fer français, SNCF]). The French government was considering the preparation of legislation requiring minimum service during public transport strikes, but this has been shelved following the conclusion of an agreement designed to prevent industrial disputes at SNCF, in October 2004 (FR0412101N).

The impact of low-cost airlines

Low-cost airlines have had an impact on industrial relations in the airline sector in the majority of countries examined in this survey, albeit to varying degrees. In some countries, this is a relatively recent phenomenon, while in others it is a more long-standing issue. The construction of new airports or extension of existing airports, usually in regional locations or at some distance from major towns, has increased the opportunity for low-cost airlines to operate in many countries.

The European Low Fares Airline Association (ELFAA) was established in late 2003 and formally launched on 27 January 2004 to represent the interests of low-cost airlines and the low-fares sector to the EU institutions. Its current membership comprises:

  • Norwegian Air Shuttle AS, based in Norway;
  • Air Berlin, based in Germany;
  • Flybe, based in the UK;
  • Wizzair, registered in the UK, with operating subsidiaries in Poland and Hungary;
  • Hapag-Lloyd Express, based in Germany;
  • Ryanair, based in Ireland;
  • SkyEurope, based in Slovakia with operations also in Hungary and Poland;
  • Sterling, based in Denmark;
  • Kullaflyg, based in Sweden;
  • Flying Finn, based in Finland;
  • Volare, based in Italy; and
  • Transavia, based in the Netherlands.

The EFLAA claims to represent airlines accounting for 15% of all inter-European air traffic. Its mission statement is as follows: 'To ensure that European policy and legislation promote free and equal competition to enable the continued growth and development of low fares into the future, allowing a greater number of people to travel by air.' The activities of the EFLAA centre on identifying the policy areas that affect the low-fares sector, working to influence regulatory issues and promoting the common interests of its member organisations in the European institutions.

The growth of Ryanair

The Irish-headquartered low-cost airline Ryanair has enjoyed phenomenal success over the past 20 years. It was set up in 1985 by the Ryan family, flying one route between Ireland and the UK. As at the end of 2004, it employed 2,600 staff and carried 24,635,000 passengers over the year. It bills itself as a 'no-frills' airline, offering cheap tickets to passengers and often using regional rather than main airports, where landing fees are cheaper. Other cost-cutting measures include quick turnaround times for aircraft, no free in-flight meals and the use of the internet for booking tickets - customers are sent confirmation emails rather than mailed paper tickets.

In industrial relations terms, the main impact of Ryanair has been the constant disputes it has had with trade unions in various countries across Europe over its non-union policy (EU0312204N). So far, it has resisted many trade union efforts to gain recognition, and this has been the subject of much campaigning on the part of the International Transport Workers’ Federation (ITF), which has launched a campaign and devoted a specific website to this topic.

In Ireland, Ryanair is having a significant impact on industrial relations (IE9803114F and IE9903135F). The IMPACT trade union has taken a case to court for recognition and representation rights for pilots, the outcome of which is awaited with interest by industrial relations commentators. Ryanair is also at the centre of a recognition dispute in Sweden, with its management resisting pressure to conclude collective agreements for its workforce in that country, maintaining that its staff are all employed on Irish contracts of employment.

A recent case in Belgium may be of significance in this regard. The dismissal of three of Ryanair’s Belgian employees after a year’s trial period was contested as, under Belgian law, a trial period can last nine months at the most (BE0312302N). The case was taken to court, with Ryanair arguing that the workers were covered by Irish legislation as they had been hired in Ireland and were employed on Irish contracts of employment. However, the Belgian court in Charleroi stated that even if Ryanair workers are employed on Irish contracts, in this case Belgian laws take precedence, because it considered Charleroi airport to be the place of employment. It is expected that this case will have a considerable impact on the aviation sector, as it is the first instance of the place of employment being used as the principal criterion for determining which law is applicable to an airline’s workers.

In France also, air transport unions are demanding that both Ryanair and easyJet accept that their employees in France are covered by French labour law, and are lobbying the government to intervene.

The other major low-cost carrier in Europe (in terms of staff and passenger numbers) is easyJet, which employed 3,345 staff as at November 2004. This airline was founded in 1995 by Stelios Haji-Ioannou and the family remains the company’s major shareholder. It has grown rapidly and in 2004 carried 24,300,000 passengers. However, unlike Ryanair, easyJet recognises trade unions.

Table 6 below is taken from an ITF and European Transport Workers’ Federation (ETF) study, comparing the terms and conditions of junior cabin crew members at a range of airlines. According to the study, employees at Ryanair were worst off.

Table 6. ITF/ETF comparison of junior cabin crew terms and conditions (score 0-5, worst-best)
Airline Pay received during initial training?/Score Airport ID paid for by/Score Uniform paid for by/Score Probationary period/Score No. of days paid holiday per year for junior crew members/Score Total score
Ryanair Lunch supplement only 1 Crew member 0 Crew member 0 12 months 1 20 days 2 4
Southwest Airlines Lunch supplement Graduation payment (USD 1,000) 3 Airline 5 Crew member 0 6 months 4 14 days 1 13
easyJet Reduced salary. 4 Airline 5 Crew member 0 12 months 1 32-36 days 4 14
Travel allowance
Sector pay after 4 weeks
Iberia No salary during initial training 0 Airline 5 Airline 5 3 months 3 30 days 4 17
Alitalia Hotel accommodation 2 Airline 5 Airline 5 6 months 4 20 days 2 18
Lufthansa Reduced salary 4 Airline 5 Crew member (50%) Airline (50%) 3 6 months 4 42 days 5 21
Lunch supplement
Hotel accommodation
My Travel Airways (charter) Full starting salary 5 Airline 5 Airline 5 6 months 4 25 days 3 22
Skyways Sweden (regional) Full starting salary 5 Airline 5 Airline 5 6 months 4 25 days 3 22
FlyMe Sweden (low cost) Full starting salary 5 Airline 5 Airline 5 6 months 4 25 days 3 22
SAS Full starting salary 5 Airline 5 Airline 5 0 months 5 28 days 3 23
Britannia Airways Full starting salary 5 Airline 5 Airline 5 6 months (approx) 4 42 days 5 24

Source: Information based on ITF/ETF survey of junior cabin crew and from other public sources.

Important note: This table reflects research carried out by ITF/ETF and not the opinion of EIRO.

Low-cost airlines around Europe

The market share of low-cost airlines is growing in many countries. For example, in Germany, according to a report by the national air traffic control organisation, the share of flights in Germany that are operated by low-cost airlines rose from 4.7% in 2001 to 14% in 2004 and is expected to increase further to a third of the market by 2010. However, it should also be remembered that this is a fast-moving sector, characterised by the creation of many new airlines, a number of which file for bankruptcy after a relatively short life. In Greece alone, for example, it is estimated that between 1995 and 2001 over 10 airlines suspended operations.

One of the main impacts of low-cost airlines has been on the price of air fares (this in turn exerts a downward pressure on pay - see below). Their presence has forced national carriers and other airlines in the sector to reduce their ticket prices in order to compete with the low-cost carriers. For example, in Norway, the low-cost airline Colour Air, which was created in 1998, forced SAS and Braathens to reduce their fares substantially. As a result, all three airlines were operating at a loss for a period. Conversely, the end result of this was the reinforcement of monopoly rather than the creation of sustained competition - Colour Air went into liquidation and Braathens was bought by SAS. In Ireland, where the low-cost carrier Ryanair is headquartered, the national carrier, Aer Lingus, has been obliged to move to a lower-cost model in order to survive in what has become an intensely competitive environment.

One other major result of the presence of low-cost airlines has been the setting up of low-cost subsidiaries by national carriers, in an effort to compete. Although many of these operate the same terms and conditions for staff as their parent companies, there is often pressure on trade unions to accept wage cuts and less favourable terms and conditions, particularly in the case of new recruits.

There has been a considerable amount of concession bargaining in the sector in recent years, largely in the context of restructuring exercises as national carriers try to cut costs in the face of increased competition from low-cost carriers and aim to increase their operational flexibility. For example, in the UK, BA has tried to obtain greater flexibility from its workers. In Denmark, Sweden and Norway, trade unions have been engaged in concession bargaining with SAS management for a number of years as the airline attempts to restructure and regain financial viability. For more details, see above under 'Restructuring'.

Elsewhere, the existence of low-cost airlines has contributed directly to restructuring and job losses in national carriers. This is the case in the UK, where national carrier BA has shed a substantial number of staff in recent years in the context of a cost-cutting exercise, partly in response to increased competition from easyJet and bmibaby.

Industrial relations implications of low-cost airlines

In industrial relations terms, low-cost airlines are a challenge for trade unions, as, in order to achieve lower costs, these airlines often employ fewer staff on terms and conditions that are less favourable than elsewhere in the sector. Unions have therefore been monitoring the situation in low-cost airlines closely, focusing on trying to ensure union recognition and terms and conditions in line with national carriers and longer-established airlines. They have achieved this with varying degrees of success.

In some countries, the presence of low-cost airlines does not appear to have been particularly detrimental in industrial relations terms. For example, in Norway, low-cost airlines recognise trade unions. In Austria, the low-cost airline, Niki Fluggesellschaft, recognises trade unions, but membership numbers are low, there is no collective agreement and no works council. However, pay for pilots and flight attendants is comparable to other airlines in Austria. In Belgium, a trade union delegation was set up in the low-cost carrier Virgin Express in 2000, regulations on a works council were signed in 2003 and a collective agreement was concluded in 2004. Trade unions believe that terms and conditions for employees at Virgin Express in Belgium are identical to those in other airlines operating in the country. In Denmark, the sector appears to have avoided significant industrial relations consequences so far.

In Hungary, low-cost airlines are reported to offer higher wages than the national carrier, although employees are obliged to work longer hours and undertake additional duties, such as cleaning cabins in the case of flight attendants. Low-cost airlines reportedly tend to poach staff from the Hungarian national carrier.

In the UK, trade unions have a presence in low-cost airlines and attempts to remove them appear to be limited.

ITF survey on low-cost carriers

The International Transport Workers’ Federation (ITF) has drawn up a survey on The industrial landscape of low-cost carriers, in which it compares the practices of low-cost airlines around the world, on the basis of survey responses from trade unions. The report expects the growth of low-cost carriers to continue in the medium term, and certainly up until 2010.

ITF states that trade unions have succeeded in either gaining or retaining union recognition in 70% of low-cost airlines. However, it also notes that in some cases, recognition is limited to one country or location or covers only some categories of employees. In half of the cases surveyed, more than one union represents employees, usually separated by job category. In Europe, it found that Ryanair was the only consistently non-union company - see table 7 below.

Table 7. ITF survey of union recognition in low-cost carriers in Europe
Airline Country Recognition
Buzz (previously owned by KLM, taken over by Ryanair in 2003) Ireland Yes
Deutsche BA (now owned by easyJet) Germany/UK Yes
easyJet UK Yes
Go (now taken over by easyJet) UK Yes
Ryanair Ireland No
Virgin Express Belgium Yes

*Source: ITF survey - The industrial landscape of low cost carriers, October 2002.

In terms of employment and working conditions at low-cost airlines, the survey finds that most carriers employ equal numbers of workers on open-ended contracts and workers on fixed-term contracts. It notes that a 'huge majority' offer lower terms and conditions than major scheduled carriers, with only a majority offering conditions comparable to those at major scheduled carriers - ITF states that 'we suspect this is the case when a new low-frills carrier operation is established using an existing mainline carrier’s workforce'. Differences in terms and conditions include areas such as monthly basic pay, hourly premia, holiday entitlement, days off per month, overtime limits, monthly or weekly working time and monthly block hours (hours spent on board the aircraft) - see table 8 below.

Table 8. ITF survey of difference in working conditions between low-cost and mainline scheduled air carriers
Employment conditions Range (%) Average /- in %
Monthly block hours (air crew) 10 to 35 26%*
Monthly/weekly working time (ground staff) 10 to 20 15%
Overtime limit -15 to 30 15%
Monthly basic pay -5 to -50 -21%
Hourly premium -12 to -40 -24%
Monthly days off -5 to -20 -16%
Holiday entitlement -5 to -20 -13%

* Many unions stated that this is achieved by not having any limits other than the legal national limits set by the civil aviation authority.

Source: ITF survey: The industrial landscape of low cost carriers, October 2002.

One feature of the culture of low-cost carriers that is highlighted by the report is the creation of a 'company atmosphere' by staging company picnics and barbeques and other 'paternalistic' methods in order to create a sense of company culture and a 'them and us' mentality.


It is clear that the European airline sector has experienced immense changes over the past two decades and is still subject to constant restructuring and change. The emergence of many low-cost airlines, following liberalisation of the sector, poses a significant challenge to the more established national carriers in terms of competition on the basis of cost.

Employment in the national carriers has been reduced significantly in many countries, as they shed staff in an attempt to cut costs and increase competitiveness. Conversely, the emergence of new airlines has been a new source of employment for many.

In industrial relations terms, there has been significant and ongoing upheaval in many countries, as the established airlines try to cut costs and many of the newer low-cost airlines offer reduced pay and terms and conditions to their employees. Trade unions are also engaged in battles over recognition and representation in the newer airlines, and are concentrating on upholding existing terms and conditions and saving jobs in the more established airlines.

In terms of collective bargaining, the sector is characterised by the fact that company-level agreements predominate, reflecting the dominance of national carriers. Dedicated employers' organisations for the sector do not exist in several countries. Even in Germany and Austria, where sectoral bargaining generally predominates, there is no sector-wide collective agreement for the airline sector.

As to the future, restructuring and change in the sector is likely to continue in the medium term, as liberalisation and privatisation of national carriers has not been fully completed in many countries. Further, the consequences of certain developments, such as the merger of the Dutch national carrier KLM with the French national carrier Air France, will, according to observers, not become clear for a number of years.

In the new EU Member States, the sector is likely to grow in the coming years, reflecting the demand for increased air traffic associated with EU membership. For example, in Slovakia, the number of air passengers doubled between 2003 and 2004.

The issue of how to manage restructuring and change will therefore be a key topic for the future. For trade unions, the focus will continue to be on issues such as how to ensure that the staff of national carriers maintain their employment terms and conditions and enjoy employment guarantees, how to increase trade union membership and recognition in the new airlines and how to ensure that the presence of new, low-cost airlines does not have a detrimental impact on overall terms and conditions in the sector. (Andrea Broughton, IRS)

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