Labour in the Aviation Industry: Wages, Disputes and Shocks

The chapter examines wage, industrial disputes, and economic shocks in the aviation and allied industries through an economics lens. The industry employs a diverse range of people with different characteristics and skill sets which influence the price of labor. The sensitivity of demand and supply to wage changes is an important factor in determining the relative power of employee and employer and the propensity to labor conflict. Levels of unionization have been traditionally very high, increasing the likelihood of industrial action in dispute resolution. Such action can be extremely disruptive to the sector in terms of cost and reputation. However, the advent of low-cost airlines has changed the business model and labor dynamic, as leaner cost models have driven less advantageous employment terms and contracts. More recently, COVID-19 has devastated the industry, with planes grounded and worldwide redundancies. The severity of the virus and its mitigation could herald a more fundamental change in travel patterns and employment in the industry.