Working conditions in aviation: How aviation tackled the COVID-19 crisis
The aviation industry was hit hard by the Corona shutdowns. Almost all aircraft were grounded for long periods, and this affected not only airlines but also all other aviation-related businesses. How did the industry deal with the crisis? Were some links in the value chain hit harder than others? How did the crisis affect the relationship between employers and employees? The research project VIRAL has attempted to answer these questions and shed light on the development of industrial relations within aviation before, during, and after the Corona lockdowns in seven countries.
All links in the aviation value chain were hit hard by the COVID-19 pandemic. Even before the pandemic, many major airlines were struggling to stay competitive in an industry with fierce competition and constant changes.
In the 1990s, increased liberalisation created considerable turbulence in aviation. In particular, the emergence of low-cost airlines such as Ryanair brought a new business model into aviation and exposed traditional airlines to increased competition. The low-cost carrier business model is based on finding the cheapest possible labour and service and establishing bases in the countries and cities that can offer the most attractive conditions. This development has put wages and working conditions under considerable pressure throughout the aviation value chain. While capital, labour and aircraft are effectively transnational in aviation , the regulation of wages and working conditions is tied to national collective agreements and legislation.
This development has been particularly challenging for large traditional and partially state-owned airlines – the so-called 'flag carriers' such as SAS, Lufthansa, Air France, and others. These companies have historically ensured employees decent working conditions via collective agreements in their respective national labour market systems, not least based on an effective monopoly on many vital routes. Low-cost airlines have thus not only challenged traditional airlines but also the national labour market models in aviation.
The Corona pandemic has been a prism that has shed extra light on these challenges. Against this background, the research project VIRAL - Varieties of Industrial Relations in Aviation Lockdown analyzes how the aviation industry in seven European countries tackled the Corona crisis.
An industry with two different regulatory systems
The research project finds a number of interesting results, both across national boundaries and in individual countries. In many countries, there is a clear tendency for airborne crew – pilots and cabin crew – to work on company agreements, while employees 'on the ground' largely work on industry agreements. This also applies to Denmark, where no industry agreements for flying personnel exist. Hence, we find a multitude of different company agreements rather than a framework agreement, which is normal in most of the Danish labour market.
The tripartite system showed strength
Corona hit the entire value chain and several smaller airlines went bankrupt, while other aviation-related companies either had to lay off employees or closed completely. Around Copenhagen Airport alone, it is estimated that around 23,000 jobs were directly linked to the airport when the pandemic started, and from March to September 2020, it is estimated that approximately 10,000 of those jobs disappeared.
When the Corona pandemic hit, the Danish tripartite system showed its strength by implementing support schemes and aid packages for companies and employees. Compared with other countries, these schemes were introduced very quickly in Denmark, and further tripartite agreements were concluded as the crisis dragged on.
The aviation sector used these support schemes to a large extent, especially wage compensation and support for operations and fixed costs. The aim was to retain the workforce for as long as possible. The condition for the salary compensation was, however, that employees could not be dismissed, which meant that eg. SAS quickly opted out of salary compensation and instead laid off or sent employees home on leave without pay when the crisis appeared to drag on.
The work distribution scheme, which replaced the wage compensation scheme, was, on the other hand, difficult to exploit for companies that had flying staff, as it was difficult to divide the work in the air with stops in different countries.
Early in the process, the government and parliament also showed a willingness to make special arrangements for aviation because the industry was extremely hard hit by the crisis. However, special support for Danish airlines was quickly curbed by EU competition law rules. Instead, the state chose to support all active airlines in Denmark by reducing airport taxes in general. Consequently, foreign companies, including low-cost companies such as Ryanair, received equal support.
Is aviation sufficiently prepared for a crisis?
Over the summer of 2022, many Corona restrictions were abolished, and the desire to travel returned. The planes were ready to take off, but the industry had great difficulties recruiting sufficient new labour. The crisis had lasted so long that many former employees, e.g. luggage handling and security, had found jobs elsewhere. This hit many passengers in the summer of 2022, when the queues for security were long in many European airports. Furthermore, in 2023, the industry was affected by the lack of air traffic controllers because older employees were dismissed or had retired during the crisis, while at the same time management failed to train new air traffic controllers.
How will aviation be regulated in the future?
We often praise the Danish model for its ability to deal with change. However, in some areas and industries, there are weaknesses. The highly internationalised business model in aviation allows employers and companies to shop around and place capital, means of production (aircrafts) and employees where the conditions are most favourable. It potentially generates competition between countries and airports to provide the most favourable conditions for airlines in terms of infrastructure and costs, including labour costs. Thus, low-cost airlines’ pursuit of low costs has had a major impact on wages and working conditions for all employees along the aviation value chain, not only pilots and cabin crew but also personnel in the companies on the ground, such as luggage handling, shops, security, mechanics, air traffic controllers, and catering. The Danish model does not currently seem to be optimally designed to tackle challenges from international companies that are chasing the best possible conditions across borders.
The research project VIRAL (Varieties of Industrial Relations in Aviation Lock Down) sheds light on the development of industrial relations within aviation before, during, and after the Corona shutdowns in seven countries: Denmark, France, Ireland, Italy, Poland, Spain, and Germany. Steen E. Navrbjerg was responsible for the Danish part of the project. The project’s results were presented and discussed in Brussels on June 8, 2023. Read more about the VIRAL project and its recommendations on the project’s website, viralproject.eu.
Read the full report: ‘Denmark: Industrial Relations pre-Covid-19 - generally and in Aviation’
Read the full report 'Denmark: Industrial Relations in Aviation during Covid-19'
Read about the danish cases: ‘Pilot strike in the legacy airline SAS 2022’ and ‘Air Traffic Controllers – a scarce resource after (recurrent) crises’.