In a globalized economy, companies source individual parts of their product or service from whichever country or company offers the lowest cost, best quality, etc. This is what manufacturers, retailers, IT companies and others have been doing for the last couple of decades. Consumers get cheap(er) products, supply chains mature and local jobs disappear.
And now, an airline trying to do the same thing, is running into a lot of opposition from the international Air Line Pilots Association. Among other things, it took out a full page in the Washington Post recently (because…a lot of lawmakers and policy types who ultimately they need to influence live in the DC area. I guess.) that I included above.
Their core argument, as Claire Zillman writes in Fortune Magazine, is this:
“At bottom, [Norwegian] seek[s] to establish a new flag of convenience in Ireland to avoid Norway’s labor laws and lower labor costs,” Delta Air Lines (DAL), United Airlines (UAL), and American Airlines (AAL) said in a joint letter to the Transportation Department.
“That’s why we’re calling it Walmarting,” says Edward Wytkind, president of the Transportation Trades Department of the AFL-CIO, which represents airline industry unions. “This could dumb down labor standards to the point where it’s hard to make a living wage in the airline industry.”
It will be interesting to see who wins. My money, in this case, is on the airline pilots association who will likely make the case to regulators and lawmakers that this model raises huge safety concerns and lack of accountability.
But if they don’t win the argument, (as the pilots fear?) will we start to see US airlines, especially the ones like Spirit, adopt the same business model?