HRM’s Role in Airlines 1

HRM’s Role in the Competitive Airline Industry

MGMT 314 Human Resource Management
Module 4.5
Daniel Brooks
Embry-Riddle Aeronautical University
February Term
HRM’s Role in Airlines 2

Abstract

The research paper will cover many facets of the role HRM plays within the airline industry. We

will focus on the role that Human Resource Management plays in today’s highly competitive

airline industry. As airlines become more competitive, and profit margins narrow, human

resource management becomes a more imperative and integral part of the airline’s structure and

strategic path towards the future. I will examine some of the challenges facing today’s HRM’s

departments. Finally, in conclusion, I will focus on the best path Human Resource Management

must utilize in ensuring the airline remains viable and competitive in the future.
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HRM’s Role in the Competitive Airline Industry

First, we must define what HRM is before we can truly understand what role it plays and

what it means to the airline industry as they become more competitive and profit margins

narrow. HRM stands for Human Resource Management and this “describes the people who work

for a company or the organization and department responsible for managing resources related to

employees” [ CITATION Unk \l 1033 ]. Human resource management is playing an extremely

important role contributing to the bottom line here in the airline industry. Every dollar a

customer spends is being battled for by a large number of airlines. Thus, the benefits of HRM are

two-fold. If handled properly, HRM creates a more effective company, with more satisfied

employees who seek to serve the potential customer with a greater amount of efficiency and

friendliness. Second, HRM saves dollars by cutting legal and regulatory costs, decreasing

employee turnover and retraining costs, and creating benefits packages which are more

economically feasible.

A study was completed in 2014 which appeared to demonstrate definitively the impact

human resource management can have on the airline industry. Because cost variables are similar

amongst the larger airlines, for example, a Boeing aircraft and an Airbus aircraft would have a

similar dollar expense, different airlines can be compared with relative ease. In previous times,

when airlines had limited airline routes, airline competition was limited. As open skies became

the norm, competition increased. Full-service carriers, more established companies, had a long-

term policy which tended to create completely separate jobs for each individual with little, if any,

crossover between job descriptions and responsibilities. Newer, low-cost carriers, could not truly

afford that luxury. Therefore, many of their personnel were cross-trained, resulting in a more

streamlined management style, allowing for quicker decision making to occur. Personnel at
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lower cost airlines might be compensated with “free” miles or bonuses for higher sales on flights.

This allows for compensation commiserate with revenue.

Thus, human resource management allows for a tremendous difference in cost,

efficiency, and bottle line analysis. Human Resource Management is looking at the health and

safety of the Airlines and looking for ways to improve in at least these two areas. Even in low-

cost air carriers, Human Resource Management plays such a part when it comes to the

recruitment of pilots and the hiring of mechanics to maintain the aircraft. Each of these two

parties is such a vital part of airlines and without either the airline will not function.

When we look at the safety of the airlines in the competitive world we see at times that

human resource management has their hands full with the management of policies and

procedures that must be established, and the expectation set that these will be followed. Human

Resource management must be willing to content with pilot labor unions along with unions for

mechanics. The health and safety programs of the airlines which are managed by the human

resource management and can be tied to four themes: 1) cost-effectiveness 2) commitment 3)

quality and 4) strategic implementation [ CITATION Boy04 \l 1033 ]. The most important of these

four is the cost-effectiveness, especially when profit margins are narrow, and money must be

spent wisely. Every dollar is being fought for by every airline as each customer has a choice of

which airline to book travel through.

While it is the airline's responsibility to operate safely and efficiently within the confines

of the rules and regulations set forth by the human resource management department we see that

at times when the budget is tight that corners are cut. While some corners can safely be cut we

see other times where these cutting corners result in crashes and sometimes fatality of the

passengers aboard. Human resource management must work to strategically prevent these
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accidents from occurring. One of the ways that they can ensure that shortcuts are not taken is

through proper training and retraining as needed of every employee from the top down. They

must work to ensure that the airline is competitive especially in today’s day and age where we

have low-cost air carriers pulling customers away from some of the larger airline companies in

the industry.

One of the many ways that HRM is playing a big part in the airline industry is in the

recruitment of personnel for the airlines. Some airlines have a “distinctive set of people-

management practices”[CITATION Ata12 \t \l 1033 ] that are a part of their company. Recruitment

is an integral part of the process and one where airlines have become increasingly more

particular about the individuals that they hire. If airlines hire an individual who gives a reason for

trust to be called into play or whose morals do not match with that of the company the

productivity and morale within the company will be lower and thus the safety factors increase

and the profits decrease. This is a reason why human resource management must be aware of the

companies needs and seeks to fulfill the needs of that company.

HR management in the airline industry may be one of the more difficult fields for

handling personnel. The airline industry is volatile, constantly in a state of change involving

mergers, bankruptcies, and changing customer demands. Not only must these changes be

handled at a rapid pace, but there is little room for error. In addition, there is a tremendous

number of individualized jobs in the industry, all of which have different needs for salary,

benefits, etc. From the pilots to the flight attendants and other cabin crew, to the aircraft

mechanics, cleaning crews, repairmen, then finally on to the executive team, HR must find a way

to please all parties involved. As mentioned previously, all of this also exists under a big

umbrella which includes safety of passengers and crew.

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Technology is a growing concern in the airline industry, so skill set must be considered.

Most potential employees desire some form of guaranteed employment in such a rapidly

changing field. Finally, unions, labor issues, and disgruntled employees are large concerns,

which continue to grow larger. While we see many negatives, there is also the potential for

human resource management to be a tremendous and positive asset as the industry continues to

move forward.

Human resource managers can be leaders in developing positive transformations in the fast-

changing world of the aircraft industry. They are the link between upper management and front of the

house employees who truly understand what is going on within the airline. The future of HR may lie

within the connection of these two parties in brainstorming for ideas and designs for the airline. This

connection between airline administration and employees will lead to greater external service. The

highest performing businesses in the world invest heavily in all aspects of human resource management.

Why would airlines not want to follow this same business model?
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References

Boyd, C. (2004). Human Resource Management and Occupational Health and Safety. New York, New

York: Taylor & Francis Group. Retrieved from https://books.google.com/books?

id=yRgpbpniXDoC&printsec=frontcover#v=onepage&q&f=false

Furkfon, A. (2014, August 6). People Management. Retrieved from HayGroup: blog.haygroup.com/part-

4-people-management/

Harvey, G. (2007). Management in the Airline Industry (1 ed.). Taylor & Francis Group. Retrieved from

https://ebookcentral-proquest-com.ezproxy.libproxy.db.erau.edu/lib/erau/detail.action?

docID=325188

MIT. (2006). Lean Production in the Air. MIT, Industry Advisory Board. Retrieved from

http://web.mit.edu/airlines/industry_outreach/board_meeting_presentation_files/meeting-oct-

2006/7-Gittell%20Lean%20Production%20in%20the%20Air.pdf

Mote, D., & Heil, K. (n.d.). Human Resource Management (HRM). Retrieved from Reference for Business:

http://www.referenceforbusiness.com/encyclopedia/Gov-Inc/Human-Resource-Management-

HRM.html

Rao, V. (2017, Mar 29). Market Leadership Through Innovative HR Practices. Retrieved from

papers.ssrn.com: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2942018

Richard, O. C., & Johnson, N. B. (2001, March). Strategic human resource management effectiveness and

firm perform. International Journal of Human Resource Management, 12(2), 299-310.

doi:10.1080/09585190010015105
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Unknown. (2012, March 5). A tale of two airlines: Can low cost carriers be sustainable and good places

to work? Retrieved from Theconverstation.com: https://theconversation.com/a-tale-of-two-

airlines-can-low-cost-carriers-be-sustainable-and-good-places-to-work-5504

Unknown. (n.d.). What is Human Resource? Retrieved from HumanResourcesEDU:

https://www.humanresourcesedu.org/what-is-human-resources/

Wilson, S. (2005). Human Resource Management in the Airline Industry - The Example of Star Alliance.

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