Bachelor Thesis

International Business Management

Hochschule für Wirtschaft und Recht Berlin/Berlin School of Economics and Law

―The implications of the cost leadership strategy for employees -

A comparative analysis of the European low cost carriers Ryanair and easyJet with the US pioneer

Southwest Airlines‖

Sonja Rövenstrunck

Student No. 310392

sonja.roevenstrunck@gmail.com

First Supervisor: Prof. Dr. Christoph Dörrenbächer

Second Supervisor: Prof. Dr. Andreas Polk

Date of submission: Tuesday, 12 August 2014 Wordcount: 18.483

Abstract:

The low cost business model dominates the airline industry, due to its adaptability to the dynamics

of the competitive sector. Representing one third of total cost, labor is an especially significant

factor targeted for cost reduction. This paper investigates the implications of the low cost business

model for pilots and cabin crew. In comparing the employee relations of Southwest Airlines,

Ryanair and easyJet, it finds that the implications vary among airlines and employee groups. The

aspect ‗working conditions‘ is found to be the only variable affected by the business model among

all airlines. Southwest Airlines principally displays exemplary employee relations, whereas Ryanair

utilizes the business model to implement cost reductions in this precise aspect. EasyJet, in turn,

widely adopts Southwest‘s approach, yet Southwest‘s core remains inimitable. Conclusively, the

extent to which cost reductions affect employee-relations ultimately determines job satisfaction and

is largely dependent on management‘s stance on employees.

Keywords: cost leadership, low cost carriers, labor cost, competitive advantage, employee relations,

trade unions, appreciation, job satisfaction

i

Table of Contents

List of Tables ...................................................................................................................... iii

List of Figures ..................................................................................................................... iii

List of Abbreviations ......................................................................................................... iv

1. Introduction ......................................................................................................................1

2. Literature Review.............................................................................................................3

2.1 Porter‟s strategic choices .......................................................................................................3

2.1.1 The business model of low cost carriers (LCCs)...............................................................4

2.2 Developments in the airline industry ....................................................................................6

2.3 The role of labor in the airline industry ...............................................................................7

2.3.1 Labor Costs .......................................................................................................................8

2.4 Corporate Culture ................................................................................................................10

2.5 Trade unions .........................................................................................................................11

2.6 Motivational factors .............................................................................................................13

2.6.1 Wage levels and compensation schemes .........................................................................15

2.7 The research gap ...................................................................................................................17

3. Conceptual Model ..........................................................................................................18

3.1 Definitions of variables .........................................................................................................19

3.2 The dependency of the variables and its presumed interrelations ...................................21

4. Methodology ...................................................................................................................21

4.1 Research method ...................................................................................................................22

4.2 Sample and population choice of research subject ............................................................22

4.2.1 Southwest Airlines (SWA) ..............................................................................................23

4.2.2 Ryanair ............................................................................................................................24

4.2.3 easyJet .............................................................................................................................24

4.3 Data collection .......................................................................................................................25

4.3.1 Secondary data ................................................................................................................25

4.3.2 Primary research ..............................................................................................................26

4.4 Data analysis .........................................................................................................................26

5. Findings ...........................................................................................................................27

5.1 Corporate culture .................................................................................................................27

5.1.1 Southwest Airlines ..........................................................................................................27

ii

5.1.2 Ryanair ............................................................................................................................29

5.1.3 easyJet .............................................................................................................................31

5.2 Training and development ...................................................................................................32

5.2.1 Southwest ........................................................................................................................33

5.2.2 Ryanair ............................................................................................................................34

5.2.3 easyJet .............................................................................................................................34

5.3 Compensation and rewards .................................................................................................35

5.3.1 Southwest Airlines ..........................................................................................................35

5.3.2 Ryanair ............................................................................................................................37

5.3.3 easyJet .............................................................................................................................39

5.4 Level of unionization ............................................................................................................40

5.4.1 Southwest ........................................................................................................................41

5.4.2 Ryanair ............................................................................................................................42

5.4.3 easyJet .............................................................................................................................43

5.5 Working conditions ..............................................................................................................45

5.5.1 Southwest ........................................................................................................................45

5.5.2 Ryanair ............................................................................................................................46

5.5.3 easyJet .............................................................................................................................49

6. Analysis and discussion .................................................................................................50

6.1 The effects of the business model on employee relations ..................................................50

6. 2 LCC management‟s stance on employees ..........................................................................53

6.3 Determining the employee‟s job satisfaction ......................................................................54

6.4 In how far is the Southwest Model transferable to European LCCs? .............................56

6.5 Managerial implications .......................................................................................................57

7. Conclusion .......................................................................................................................59

List of references ................................................................................................................62

Appendix .............................................................................................................................71

iii

List of Tables

Table 1: Overview of the key figures of the three airlines ...................................................25

Table 2: Comparison between cabin crew‘ training- and working conditions ....................33

Table 3: Overview of pilots‘ hourly salaries of major US airlines ......................................36

Table 4: Differences in working conditions, compared to network carriers ........................40

Table 5: Union recognition ..................................................................................................42

List of Figures

Figure 1: Operational features of Southwest Airlines ............................................................5

Figure 2: Employer‘s relationship with unions ....................................................................12

Figure 3: Components of the Two Factors of Herzberg‘s theory ........................................14

Figure 4: A comparison of salary expense per employee between low-cost and legacy

carriers in the US industry....................................................................................................16

Figure 5: Research gap .........................................................................................................18

Figure 6: Conceptual Model.................................................................................................19

Figure 7: Employment Relations strategies .........................................................................41

Figure 8: Position towards employees and unions of the sampled airlines .........................44

iv

List of Abbreviations

n/d = no date

BALPA = British Airline Pilots Association

BBC = British Broadcasting Corporation

CEO = Chief Executive Officer

ESOP = Employee Stock Option Plan

ETF = European Transport Workers‘ Federation

FSNC = Full Service Network Carrier

IALPA = Irish Airline Pilots‘ Association

IATA = International Air Transport Association

ILA = Internationale Luft-und Raumfahrtausstellung

ILO = International Labour Organization

ITF = International Transport Workers‘ Federation

HR = Human Resources

LCC = Low Cost Carrier

PAX = Passengers

RPG = Ryanair Pilot Group

SNPL = Syndicat National des Pilotes de Ligne

SWA = Southwest Airlines

SWAPA = Southwest Airlines Pilots‘ Association

VC = Vereinigung Cockpit

v

Affidavit / Eidesstattliche Erklärung

I declare that I wrote this thesis independently and on my own. I clearly marked any

language or ideas borrowed from other sources as not my own and documented their

sources. The thesis does not contain any work that I have handed in or have had graded as

a Prüfungsleistung earlier on.

I am aware that any failure to do so constitutes plagiarism. Plagiarism is the presentation of

another person's thoughts or words as if they were my own—even if I summarize,

paraphrase, condense, cut, rearrange, or otherwise alter them. I am aware of the

consequences and sanctions plagiarism entails. Among others, consequences may include

nullification of the thesis, exclusion from the BA program without a degree, and legal

consequences for lying under oath. These consequences also apply retrospectively, i.e. if

plagiarism is discovered after the thesis has been accepted and graded.

Ich erkläre hiermit, dass ich die vorliegende Arbeit selbständig verfasst und nur die

angegebenen Quellen und Hilfsmittel benutzt habe. Wörtlich oder dem Sinn nach aus

anderen Werken entnommene Stellen sind unter Angabe der Quelle als Entlehnung

kenntlich gemacht. Die Arbeit enthält kein Material, das ich bereits zu einem früheren

Zeitpunkt als Prüfungsleistung eingereicht habe.

Mir ist bewusst, dass die ungekennzeichnete Übernahme fremder Texte oder fremder Ideen

als Plagiat gilt, selbst wenn diese zusammengefasst, umschrieben, gekürzt, oder

anderweitig verändert wurden. Die Konsequenzen eines Plagiats sind mir bekannt. Die

möglichen Konsequenzen umfassen, unter anderem, ein Nichtbestehen der Bachelorarbeit,

den Ausschluss von weiteren Prüfungsleistungen im Studiengang, oder zivilrechtliche

Konsequenzen, die mit dieser eidesstattlichen Erklärung verbunden sind. Diese

Konsequenzen können auch nachträglich zur Anwendung kommen, also nachdem die

Arbeit angenommen und korrigiert wurde.

My name: ________________________________

Title of my

thesis:

________________________________

Date: ________________________________

Signature: ________________________________

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1. Introduction

In the highly competitive airline industry, the most successful airlines are those that

maintain the lowest cost structure (Vasigh, Fleming et al. 2008). Low cost carriers have

consequently dominated the aviation world ever since the deregulation has been put into

place, abandoning government regulation and allowing market forces to operate instead.

Consequently, a significant number of new entrants emerged that revolutionized the

industry by competing on significantly lower fares than traditional carriers and reducing

the service offer to a minimum. Although differences among individual low cost carriers

exist, they all share the objective to maintain the lowest cost structures possible. This has

not only proven to be the essential means of survival in this competitive environment, but

also the path to profitability. Evidence can be seen from the adaptive moves of traditional

network carriers, that either set up their own low-cost subsidiary (for instance Lufthansa-

Germanwings), or turn into a low cost airline themselves (as exemplified by Aer Lingus

and Air Berlin).

Consequently, if operating on the lowest cost structure possible has become the norm, what

does it imply for the airlines‘ employees?

A recent survey released by the German pilot‘s trade union Vereinigung Cockpit

(2014) indicates the relevance of the topic. It revealed that 72.6 percent of Ryanair‘s pilots

intend to leave the company, while 85 percent of the respondents indicated they would be

willing to stay if their wages and the overall level of respect they receive improved.

While academic discussions relate to the significance of employees on the one

hand, and the need to reduce particularly labor cost on the other, the direct link between

those two contradictory aspects has barely been touched upon.

Therefore, this paper seeks to examine whether there is an unambiguous interrelation

between the cost leadership strategy of low cost airlines and the employee‘s work

experience, using the examples of the pioneer Southwest Airlines, and its European

counterparts Ryanair and easyJet.

More precisely, it aims to find out whether and in how far it affects specific aspects of

employee relations such as corporate culture, training, compensation, level of unionization,

working conditions and ultimately the overall job satisfaction of workers. In particular, it

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investigates which factors contribute to Southwest Airlines‘ notably positive employee

relations and whether they could be applied to European low cost carriers as well.

To attain the research objectives, the following questions have been defined, which shall

serve as an integral part throughout the paper:

1. To what extent are employees affected by the focus on cost-cutting?

Sub-question: How does it affect their overall employee relations and job

satisfaction?

2. Could Southwest Airlines‘ approach towards employee relations be adopted by

European low cost carriers?

The five specific aspects of employee relations precisely present the key variables of

this research paper. They are condensed into a conceptual model, which illustrates the

presumed interrelations between the variables and serves as a guiding structure throughout

the study.

Qualitative research was chosen in combination with a comparative approach to answer the

research questions. Data collection centers on secondary data in combination with

additional primary research. To that end, interviews with flight attendants of the respective

airlines were conducted.

This paper will consequently demonstrate that implications of the cost leadership model

for employees vary among airlines and employee group. It will moreover find that

employee relations are widely influenced by the management‘s stance on personnel.

The thesis is organized as follows. Chapter two describes academic discussions

surrounding the research questions. It entails topics as the business model of low cost

airlines, the role of employees, labor cost, motivational theory, compensation schemes and

the role of trade unions. The third chapter presents the underlying conceptual model of this

thesis and provides definitions of the variables. Subsequently the applied methodology is

outlined. The findings of the conducted research are described in section five, and further

analyzed and related to the research questions in chapter six. Finally, section seven

concludes the paper.

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2. Literature Review

This chapter aims to provide a concise and accurate overview of the theoretical

background of the research topic. It precisely outlines the aspects covered by the literature

regarding the research questions, and ultimately determines the prevailing research gap.

The majority of terms used will be defined in chapter three.

2.1 Porter‟s strategic choices

In his famous work Competitive Strategy: Techniques for Analyzing Industries and

Competitors, Michael E. Porter (1980) proposed three generic strategies, which are widely

recognized and used. He distinguishes between a 1) cost leadership, 2) differentiation and

3) the focus strategy. In Porter‘s view, the customer depicts the most important stakeholder

of a firm. The latter‘s sustainable competitive advantage is thus related to the amount of

value a firm creates for the customer by exhibiting one of the generic strategies.

The first two strategies target a broad segment of the market, while the focus approach

targets a narrow segment in either the cost leadership or differentiation strategy (Harrison

2003). The focus approach shall not be further elaborated upon, as it is not relevant for the

research topic.

In the cost leadership strategy, companies create superior value for customers by

offering a basic product or service that is produced at the lowest possible cost, thus based

on efficient cost reduction (Harrison 2003). In particular, followers of the cost leadership

strategy strive to become the low-cost producers in the industry by finding and exploiting

all sources of cost advantage (Macário, Van de Voorde 2011) (from here on denoted as

Macário).

The author Jeffrey Harrison (2003), however, identifies the risk that a company might go

too far and thereby even endangers customers and employees in the process.

Thompson and Martin (2005) contrast Harrison‘s concern by arguing that the choice of the

cost leadership strategy does not automatically entail that employees and other

stakeholders receive lower rewards. In their view, it neither implies that a firm will market

the lowest price product or service in the industry. Rather, cost advantages are generated

by targeting a special customer group whose needs are slightly less demanding than the

average, and by avoiding unnecessary additional costs.

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The differentiation strategy, on the contrary, represents the opposite approach by

offering a distinguished product or service, which is based on attributes such as higher

quality, more innovative features or better service, and emphasizing uniqueness (Harrison

2003).

There is a general consensus on the strategic categorization of low cost airlines and

traditional carriers: ―While on the one hand the cost leadership strategy reflects the market

behavior of the LCCs, the differentiation strategy on the other hand perfectly describes the

strategic orientation of the leader airlines in the Network Carrier market segment‖

(Delfmann, Baum et al. 2005, pp. 124-125).

More precisely, network carriers seek to be unique by offering a premium price through its

differentiation in quality (Macário 2011). This is generally realized by operating a hub-

and-spoke network1, full on-board service, serving major airports, different cabin classes,

providing lounges and loyalty programs.

This type of airline is also referred to as full service network carrier (FSNC). In addition,

the term ‗legacy carrier‘ is widely applied in academia due to its roots of operating in a

tightly regulated environment (Macário 2011).

In the following, the business model of low cost carriers will be further presented in order

to demonstrate how the cost leadership strategy is applied by the latter.

2.1.1 The business model of low cost carriers (LCCs)

To begin with, a variety of terms are associated with this airline, ranging from low

cost carrier, no-frills- or low-fare airline, to discount- or budget airline. There is, however,

no commonly accepted definition. This can be attributed to the significant amount of ways

to differentiate the service within the low cost sector (Macário 2011).

Yet, common characteristic that the airlines share are the ―cult of cost reduction‖ (Lawton

2002, cited in Macário 2011) and their low cost structures. This enables LCCs to offer

lower fares than network carriers, which presents a core competitive advantage over the

latter.

1 Operating flights via a central hub airport, in contrast to point-to-point routes

5

The media ultimately generalized the terms by including any airline that offers low fares

and limited services, independent on their operating costs (Macário 2011). For the purpose

of this paper, the terms will be used interchangeably.

To illustrate how low cost structures can be achieved by LCCs, the example of Southwest

Airlines‘s operational features will be presented in the following:

Figure 1: Operational features of Southwest Airlines

Authors‘own, adapted from Thompson, Strickland et al. (2010, p. C-416-C418)

While a significant amount of authors (including Macário 2011, Delfmann, Baum

et al. 2005) claim that low cost airlines share common characteristics such as those

illustrated above, they do not take into account that its operations differ among airlines. In

fact, the only characteristics that are applied by all LCCs are the point-to-point routes

served as well as the use of e-ticketing.

Labor, moreover, plays an essential role in achieving cost advantages (Macário

2011), an aspect that will be closer examined in the course of this paper.

At this point, it is important to highlight that low cost airlines could only enter the market

in a less regulated environment (Bamber, Hoffer Gittell et al. 2009a), which was enabled

by the deregulation process. This development will be further outlined in the subsequent

6

chapter.

2.2 Developments in the airline industry

The airline industry is a dynamic, cyclical and complex industry, marked by

continuous change and a high level of competition. Moreover, the aviation industry has

seen ―the most spectacular growth over the last 20 years among all transport sectors‖

(Delfmann, Baum et al. 2005, p.20). Despite the high growth rates the industry has been

experiencing, it is overall characterized by rather marginal yields (Doganis 1991): It is

estimated by the International Labor Organization (ILO) that the aviation sector‘s profit

margin amounts to merely 0.1% (Braw 2014).

The decisive event, which enabled low cost airlines to enter the scene was the

deregulation process in the US in 1978. By abolishing institutional setting of fares, market

entry and capacity agreements, competition was severely increased by the high amount of

new entrants, which offered significantly lower airfares (Macário 2011).

Until the deregulation was fully established in Europe in 1993, legacy carriers, as the likes

of Lufthansa, Air France or British Airways, controlled 75 percent of the intra-European

market. This changed significantly after the liberalization of the industry.

The low cost model pioneered by Southwest Airlines (Southwest), and has been

copied and adopted by numerous airlines around the world (Graham 2013). In Europe, the

first adopter of the model was Ryanair, followed by the UK-based easyJet (Delfmann,

Baum et al. 2005).

While in 2001, LCCs accounted for eight percent of all aircraft seats, it was already 24

percent by 2011 (Graham 2013). Despite this fast growth, the low cost sector meanwhile

increasingly strives towards maturity (Doganis 2006).

In consequence of the low-cost evolution, airlines have to deal with important

challenges in terms of operational performance (Macário 2011).

The industry expert Doganis (2001) argues that since the deregulation process allowed the

market entrance of low cost carriers, a profound change in the nature of the airline industry

has taken place: cost reduction no longer represented a short-term response to falling seat

load factors or declining yields, but became a continued strategy for airlines in order to

7

survive in this competitive environment.

Accordingly, in the view of Macário (2011), the fierce competitive environment

inevitably does not allow airlines to pursue any other primary strategy than cost leadership.

What is more, cutting costs to the lowest possible level has become a key strategic

necessity in today‘s airline industry (Wensveen 2011).

This is illustrated by the significant amount of carriers, whether LCC or FSNC that failed

to keep up with the competition and either filed for bankruptcy or were taken over by other

airlines in recent years (Macário 2011).

2.3 The role of labor in the airline industry

―Aviation organizations should realize that people are the biggest asset.‖

(Wensveen 2011, p.438)

The airline business is a highly labor-intensive industry. It is further characterized

by a particularly skilled workforce that assumes a substantial degree of responsibility

(Wensveen 2011).

Bamber and Hoffer Gittell et al (2009a) (from here on denoted as Bamber),

specialists in the field of the employment relations in the airline industry, differentiate

between two categories of employment-relations strategies: a „command-and-control‟

approach on the one hand, and a „partnership approach‟ on the other hand, which seeks

to motivate employees to commit to the goals of the company. In the view of the authors,

Ryanair and Southwest are prime examples of followers of the opposing strategies: While

Ryanair embraces the former ‗low-end‘ approach, Southwest‘s employee-relations

strategy, and recently also easyJet‘s, can be classified into the latter, which they consider a

‗high end‘ approach (Bamber 2009a). This is underlined by a quote from Herb Kellerher,

co-founder and former CEO of Southwest, who strongly believes that ―It is the dedication

of the people in it that has made this airline a success. It is only through them that we will

continue to have success in the future‖ (cited in Holloway 2002, p. 282). The authors Miles

and Mangold (2005) accordingly claim that precisely its human resource practises

contributed to the long-term success of Southwest and its competitive advantage. Bamber

(2009b) further claims that easyJet is among those carriers outside the US that adopts

8

Southwest‘s HR practices. They ultimately conclude that in the long run, the high-road

approach is more sustainable (2012).

This demonstrates the decisive role employees play in determining the success of an

airline. The professor John Wensveen (2011) accordingly perceives that personnel are an

airline‘s most valuable asset, and that the success of a company depends on the extent to

which it applies this certain asset to both its problems and opportunities. This argument is

further supported by Thomas Lawton (1999) who holds that ―in the case of service sector

companies such as airlines, key capabilities derive from human resource management and

customer services― (p.573). Precisely, according to Thompson and Martin (2005), ―(…) it

is people who ultimately determine whether or not competitive advantage is created and

sustained.‖ (p.220).

Sustaining a competitive advantage is particularly important in light of the intense

competition. As Lawton (1999) and Doganis (2006) argue, relying solely on low cost does

not provide a sustainable advantage.

Ultimately, the relevance of employee relations is underlined by Holloway (2002), who

insists that if an airline pursues adversarial labor relations in the long term, it will be

severely negatively impacted due to the empirically supported link between employee

satisfaction and customer satisfaction.

However, while on the one hand, the significance of labor is emphasized, Doganis

(2006) argues that airline managers, on the other hand, are demanding their employees to

work harder, to accept more flexible working conditions and to be extraordinarily friendly

to customers. Simultaneously, employees have to accept staff cuts, wage reductions or

performance-related salaries. This contradiction is supplemented by Wensveen (2011),

who lists ―implementing effective cost cutting‖ as well as ―enhancing labor/management

relationships with cooperation” in reference to how to achieve success in the airline

industry (p. 14).

As labor costs play a vital role in this balancing act, it is helpful to take a closer look at it

in the following.

2.3.1 Labor Costs

“Unfortunately, for employees, labor is the area management has the most control

over in terms of cutting costs” (Wensveen 2011, p.437)

9

Cutting costs to the lowest possible level has become a key strategic necessity in

today‘s airline industry. After deregulation, it became increasingly clear that there is room

for substantial cost savings in that area.

Labor costs represent approximately 25-30 percent of an airline‘s total costs.

Representing one of the largest variable cost factors of an airline, Wensveen perceives that

labor costs are entirely out of the airline‘s control, due to the high level of unionization in

the industry (2011).

Interestingly, staff costs vary significantly between different countries. In Ireland

and England- the founding countries of the low cost evolution in Europe- the social

charges are significantly lower than those of Central and Northern Europe. This is

especially due to the higher social and tax payments: In Belgium, for instance, employers

pay 31 percent of an employee‘s salary‘s worth in social and insurance costs, while in the

UK and Ireland, these costs amount to only around half as much (Doganis 2006).

Moreover, the liberal market economies in Ireland and the UK provide more ‗permissive‘

labor markets, implying more flexible contracts that allow for lower costs (ETF 2011).

Therefore, Doganis (2006) argues that basing its airline in either UK or Ireland offers a

vital cost advantage. Thus, it is no coincident that the European low cost revolution

originated in these countries.

Bamber (2009a) identifies two key strategies of achieving further cost advantages

in labor. The first entails paying relatively low wages, keeping staffing to a minimum and

avoiding unionization or limiting union influence amongst employees. This is well

represented by Ryanair. The second alternative, which is employed by Southwest, is to

raise employee and aircraft productivity, for instance by increasing turnarounds, without

demanding concessions from labor in terms of shrinking wages or union avoidance.

According to Vasigh, Fleming et al. (2008), a significant amount of airlines follow the first

approach. The authors moreover add that in order to pay lower wages and to avoid union

contracts, the solution of many low cost airlines is to outsource various functions to service

providers that pay minimum market rates.

Another cost advantage that LCCs enjoy over FSNCs is that they sidestep seniority, which

Wensveen (2011) refers to as ―labor‘s most valued asset‖, yet simultaneously as

10

―management‘s biggest headache‖ (p. 366). As the workforce of traditional carriers is

generally more diverse in age and tends to be older than at low cost airlines, there is a

greater variation in wage rates (Wensveen 2011). In addition, no-frills carriers are not

burdened with high pension plans, post-retirement insurance benefits, or social security

funds (Chopra and Lisiak 2006, Doganis 2006).

According to Wensveen (2011), it is precisely cost advantage in labor that distinguishes

low cost airlines from established carriers.

2.4 Corporate Culture

Although labor costs are a decisive factor, the future success of airlines does not

only depend on cutting costs, yet also on establishing a cohesive corporate culture:“(…)

employees and managers must feel that they are partners, not adversaries. They are

mutually dependent.” (Doganis 2006, p. 281).

According to Holloway (2002), an organizational culture essentially develops

slowly over time by the values the airline has established which are influenced by its size,

ownership and history. He further argues that the national culture naturally influences an

organization, and thus also affects the strategic choice and service design of an airline.

In particular, corporate values are often reflected in the company‘s mission statement and

primarily serve as a guideline of how the company has chosen to conduct business

(Thompson and Martin 2005). Often times, however, the companies‘ formulated mission

and vision statements are largely forgotten when it comes to daily business operations

(Gallo 2014).

Doganis perceives that adopting a result-oriented culture, in which employees are

delegated to take on responsibility and are empowered to take their own decisions, enables

management and employees to work towards a common objective.

Thompson, Strickland et al., on the other hand, argue that a firm following the cost

leadership strategy requires a culture based on thrift and frugality in order to motivate

employees to achieve cost-savings (2010).

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2.5 Trade unions

Apart from the prevailing corporate culture, a further vital component that

influences the relationship between employers and their workforce is the corporation‘s

stance on trade unions.

The significance of trade unions for the workers of an airline is grounded on their strong

bargaining power, as they influence labor contracts, wages and working conditions. Thus,

on the one hand, employees can thereby negotiate higher wages and improve their job

security, on the other hand, it does leave firms with higher costs (Belobaba, Odoni et al.

2009). What is more, the threat of proclaiming a strike, if no agreement is found,

significantly contributes to the power of unions: Similar to other transportation modes,

airlines are particularly hurt by strikes, as they cannot store their ‗product‘ (Wensveen

2011), and since the resulting cancellations of flights result in enormous costs. The recent

three-day strike of Lufthansa‘s pilots, for instance, cost the German carrier approximately

$103 million (Reuters 2014).

There is, however, no single trade union that represents the entire workforce of a

commercial airline. Instead, each employee group, such as pilots, cabin crew2, ground

personnel or mechanics is represented by a certain union (Wensveen 2011), given that the

employer allows union cooperation.

In particular, pilots of the majority of airlines are members of strong unions. This makes

negotiating agreements with pilots a key part of an airline‘s labor relations, especially

considering that pilots are by far the best-paid airline employees (Doganis 2006). As

unions have a large say in determining wage rates, this could explain why some airlines

choose to adopt an anti-union stance.

According to Wensveen (2011), union membership among network carriers in the

United States ranges from 60 to 90 percent, while most low cost airlines are non-

unionized, which allows them to be more productive by avoiding costly work rule

limitations. Although no specific information on the percentage of non-unionized US low

cost airlines are provided, one can turn to the results of the International Transport

Worker‘s Federation (ITF) study of 2002 concerning European no-frills airlines, where the

2 equivalent for flight attendant

12

union recognition amounted to 70% of the airlines subject to the study3 (Hunter 2006).

However, this is a different case for workers affected by subcontracting, for whom it is

particularly difficult to form a union (Dobruszkes 2006).

While no exact information about union recognition is provided, it can still be maintained

that low cost carriers do not have to deal with the same union issues as the FSNCs

(Wensveen 2011) due to the very nature of the airline: As many legacy carriers were

originally government-owned, they can hardly avoid trade unions, whereas low cost

airlines have no ‗social‘ obligation of the state to negotiate with them. Moreover, they

particularly present a challenge for trade unions, as they often employ fewer staff in order

to reduce costs, and on terms and conditions that are frequently less favorable than

elsewhere in the sector (Broughton 2005).

What is more, according to a recent study by the European Transport Workers‘

Association (ETF 2011), unions find it increasingly difficult to negotiate with budget

carriers.

The author Bamber (2009b) defined three particular positions an airline can adopt

towards trade unions, namely: -avoidance, -accommodation, or partnering. Avoiding the

representation of employees can be either achieved by union oppression or union

substitution. The latter refers to the attempt of airlines to reduce the need among workforce

to form or join a union, by paying high wages and benefits.

While the accommodation refers to the mere acceptance of the existence and legitimacy of

unions and reluctant negotiations with them, partnering with unions, on the other hand, has

much more positive implications: It aims at establishing a deeper relationship with unions,

implying thorough communication and participation on a wide range of decision-making.

The authors illustrated those three possible stances in combination with the previously

discussed control- or commitment approaches (chapter 2.3) in a model to position the

airline‘s approaches towards employees (depicted below). It is considered relevant for this

research study and will be adopted to position the three elected airlines.

Figure 2: Employer‘s relationship with unions

3 The study looked at LCC in 17 EU member states

13

Author‘s own, adapted from Walton, Cutcher-Gershenfeld et al. (1994), cited in Bamber,

Hoffer Gittell et al. (2009a)

Whether or not an airline demonstrates corporation with unions or oppresses them may

severely influence the overall working environment and –conditions for the employees.

2.6 Motivational factors

The working environment and -conditions are among others decisive factors that

influence an employee‘s job satisfaction. Herzberg‘s famous Two-Factor Theory precisely

looks at the roots of job satisfaction, as well as job motivation (Miner 2007) and entails

several further aspects significant to this paper such as wages, working conditions and

recognition. In determining the implications of the cost leadership strategy for the job

satisfaction of employees, this theory will be considered.

Based on the results of a long-term study (Miner 2007), the American behavioral

scientist and psychologist Herzberg concluded that there are two different sets of factors-

hygiene- and motivation- that determine motivation and job satisfaction. The former refers

to extrinsic factors, in other words to the context of the work, which lead to dissatisfaction,

if absent. Put another way, fulfilling those hygiene factors prevents dissatisfaction. The

motivational factors, as the name implies, serve to actively motivate employees to perform

well. Those are usually related to the job itself and affect the sentiments of job satisfaction

as well as increase performance (Mukherjee, K. 2009).

The respective components of both categories are illustrated in the following:

14

Figure 3: Components of the Two Factors of Herzberg‘s theory

Author‘s own, based on Miner (2007)

A key argument regarding the extrinsic factors is that assuring positive hygiene

factors by itself does not create a positive attitude or motivation. Yet, it can only contribute

to prevent dissatisfaction and unpleasantness at work (Mukherjee 2009). Thus, they are the

precondition to achieve job satisfaction.

As far as the motivational factors are concerned, the author Pattanayak (2005) lists slightly

deviating components as those commonly referred to (Figure 3). In his view, true

motivators are determined by corporate culture, continued learning and growth

opportunities, participation, delegation and empowerment, as well as full appreciation and

recognition of work. This perception appears relevant, due to its specification of work

characteristics, which are also examined in this thesis.

Ultimately, it is important to emphasize that according to Herzberg‘s theory, job

satisfaction can only be achieved if both factors are present.

One extrinsic factor will be further examined in the following sub-chapter 2.6.1.

15

2.6.1 Wage levels and compensation schemes

The choice of compensation and wage levels can decisively serve as a reward and

determinant for motivation, however it can likewise be utilized as a means of achieving

reductions in labor costs.

Wage levels need to reflect the nature of the operations and the complexity of the

jobs (Wensveen 2011). The airline industry by nature entails a high level of uncertainty, as

employment security often seems to be dependent on the profitability of an airline, which

is volatile and dependent on the business cycle. In times of crises, many employees have

seen their wages frozen or reduced (Doganis 2006).

Even though the tasks and responsibilities of aircraft pilots and cabin crews of legacy

carriers and budget airlines do not essentially differ, yet, should one believe the

information provided by organizations, researchers, journalists and trade unions,

employees of low cost airlines are paid less than staff of FNSC despite being confronted

with a heavier workload (Dobruszkes 2006, Doganis 2006). According to a study by the

ITF (2002), wage differences range from five to 50 percent compared to legacy carriers. In

particular, the gross annual income of pilots employed by a LCC is 28 percent lower on

average, despite 25 percent more flying time. Moreover, approximately one fourth of these

wages were found to be variable (ITF 2002, cited in Dobruszkes 2006). Although the

information dates back to 2002, it is considered to be still representative today, as it has

been cited by several papers years later (i.e. Dobruskes 2006). However, it shall be

mentioned that the study does not provide information about which airline companies it

refers to.

The following graph further illustrates this phenomenon, based on the US airline industry.

16

Figure 4: A comparison of salary expense per employee between low-cost and legacy

carriers in the US industry

Graph adopted from Chopra, S., Lisiak, R. (2006)

However, by examining the literature, it neither becomes clear whether the wage

differences apply to all airlines following cost leadership, nor if they apply to pilots and

flight attendants equally.

Performance-related pay is one explanation for the differences in wage levels, which will

be outlined in the subsequent chapter.

2.6.1.1 Profit- sharing programs

In order to consistently have the workforce on the employers‘ side, even in times of

crisis, American and European airlines have been urged to turn to performance- or profit

related pay. It can therefore be argued that it mainly serves to compensate concessions in

pay or working conditions (Doganis 2006, Wensveen 2011).

17

Employee Stock Option Plans (ESOPs), in particular, got a popular means of

achieving significant reductions in labor costs among airlines in times of crisis in the

1990s. Apart from the intention to offset concessions in pay or working conditions, the

objective, on the positive side, has also been to increase employee motivation and

willingness to work. One related means of this plan is the payment of profit-related

bonuses, which implies that employees receive a certain share of the profit a company

makes. However, as Doganis (2006) points out, the objective to improve employee

relations through ESOPs is only secondary; it primarily remains a means to reduce labor

cost.

When referred to Southwest‘s profit-sharing plans, which was the first to introduce them in

the industry, it is, however, commonly emphasized as a positive contribution to its

employees (Thompson, Strickland et al. 2010). This gives reason to believe that Southwest

is one exception from the norm and indicates that ESOPs can indeed improve employee-

relations (Doganis 2006).

Doganis (2006) ultimately advocates a pay structure based on a large portion of

performance-related pay and profit sharing as most suitable for employees of the airline

industry. He moreover holds that workers of low cost airlines were prepared to obtain

lower basic salaries, but higher performance related pay, and are willing to accept greater

flexibilities in their contracts. This is, however, clearly viewed from a management

perspective. Whether profit sharing options offset concessions in wages and partly working

conditions is debatable.

He particularly suggests that this performance-related pay structure was desirable for

employees in terms of securing their job positions, in light of the cyclical industry

environment. This can further be regarded critically, since in times of a cyclical downturn,

a pay structure based on the airline‘s profits would signify lower pay for employees.

2.7 The research gap

The literature has widely covered the relevance of labor cost for the industry as a

whole and the need to reduce costs. Yet, the direct link to the effects on the workforce is

hardly to be found. While the literature indicates that employees of LCCs are worse off

than their counterparts at legacy carriers in terms of wages and workload, the findings,

however, remain widely generalized and do not provide specific information about

18

differences among individual carriers. Besides, while the literature touches on the topics of

wages and union stance, a direct connection between the cost leadership strategy and

further specific areas of employee relations have not been covered. In particular, it is

commonly stated that the Southwest model has been copied and closely adopted by other

low cost carriers, Ryanair being the forerunner. Yet, it is hardly ever mentioned by the

literature that the adoption of the model is only limited to certain operating strategies, as

severe differences between the companies exist. Thus, little distinctions are made between

the individual carriers and their attitudes towards their workforce.

The following illustration aims to put the research gap in a nutshell.

Figure 5: Research gap

Author‘s own

3. Conceptual Model

This chapter presents the conceptual model, which entails the factors that will be

examined in the course of this research project, and describes the expected relations

19

between them. To start with, a definition for each factor will be provided to avoid

uncertainty about its meanings.

Figure 6: Conceptual Model

Author‘s own

3.1 Definitions of variables

As cost leadership, the critical factor of this research paper, has already been

described in chapter 2.1, the term „employee relations‟ will be subsequently defined. For

the purpose of this paper, it is broken down to five components depicted in the conceptual

model. The term is interchangeably used with ‗employment relations‘, which is the

contemporary term for ‗industrial relations‘ (Wilton 2010). Lewis, Thornhill et al.

precisely defined employment relations as ―an economic, legal, social, psychological and

political relationship in which employees devote their time and expertise to the interests of

their employer in return for a range of personal financial and non financial rewards‖ (2003,

p. 6).

20

„Corporate culture‟ can be defined as ―the character of a company‘s internal work

climate and personality- as shaped by its core values, beliefs, business principles,

traditions, ingrained behaviors, work practices, and style of operating‖ (Thompson,

Strickland et al. 2010, p. 386).

The next component is „employee development‟, which signifies ―the process through

which employees acquire new behaviors, skills, knowledge, attitudes, and motives,

increasing their value to the organization and/or on the labor market‖ (Krausert 2008,

p.118).

The authors Caruth and Handlogten (2001) define „compensation‟ as ―the total reward

package offered by an organization to its employees.‖ Moreover, it entails ―all the rewards

or payments – tangible and intangible, monetary and nonmonetary, physical and

psychological- that an organization provides its employees (…)‖ (p.1).

Trade unions can be defined as ―representatives of worker‘s interests, they directly

influence national and regional policy as well as employment relations within unionised

organizations‖ (Gardner, Palmer 1997, p.85).

Working conditions, the last aspect of employee relations, describes ―the working

environment and all existing circumstances affecting labor in the workplace, including job

hours, physical aspects, legal rights and responsibilities― (US Legal n/d).

The following definition of appreciation describing it as ―the act of estimating the

qualities of things according to their true worth‖ (Emmons, McCullough 2004, p. 231) will

be considered.

Job satisfaction implicates ―a pleasurable emotional state that often leads to a positive

work attitude and improved performance― (Wicker 2011,p.3). For the purpose of this

thesis, it only refers to the context and conditions of the work, rather than the job itself.

Ultimately, competitive advantage, an aspect that will only be briefly touched upon, has

been defined according to Porter in chapter 2.1.

21

3.2 The dependency of the variables and its presumed interrelations

The single independent variable of the research project is cost leadership; all other

depicted variables are dependent. The variables listed in the conceptual model, however,

are not exhaustive. To answer the research questions, it shall be determined, whether a

relationship exists between the cost leadership strategy and employee relations, and in how

far it influences the following implying factors corporate culture, training and

development, compensation and wages, the level of unionization and the working

conditions. Although there are numerous other factors that form part of employee relations,

it has been decided to limit the variables to those five factors, as they are believed to be the

categories in which a possible implication of the underlying strategy would be most

visible. A further reason of limiting the number of categories is to keep the research

focused, due to the limited scope of the thesis.

It is assumed that the five chosen variables of employee relations influence the

level of appreciation of employees. For instance, certain working conditions or the amount

of financial compensation can be indicative of the employee‘s perception of feeling

appreciated. This again stands in relation to job satisfaction, which in turn is academically

proven to be directly linked to customer satisfaction. As the latter aspect has been

extensively covered by researchers, it shall only be briefly touched upon.

Hence, it is anticipated that positive employee relations would lead to appreciation among

employees, which is perceived as a necessary requirement to achieve job satisfaction. This

again stands in direct relation to satisfied customers, which as a result potentially presents

a competitive advantage. In other words, all those variables are assumed to be influenced

to some degree by the cost leadership strategy in the first place.

4. Methodology

This chapter describes the underlying methodology applied for the research project.

It encompasses the chosen methods, the research samples as well as the data gathering

process.

22

4.1 Research method

This research paper is based on qualitative research, as it aims at understanding the

meaning and implications of the cost leadership approach for employees and to provide an

inside into this phenomenon.

The underlying research technique is a deductive approach of linking theory and

research.

In terms of research design, this study can partly be ascribed to the descriptive research

approach in so far as it primarily deals with the interrelations and influences between

different variables. However, the descriptive nature of the study underlies a comparative

approach to answer the research questions, in order to highlight similarities and

differences (Mills, van de Bunt 2006) between three low cost airlines operating on the

same principle of cost leadership, yet demonstrating different characteristics in terms of

employee relations. The researcher perceives that by means of comparing different cases,

the results have a wider applicability than if merely one airline was closely examined. It

shall be mentioned, however, that a comparison of three airlines, although based in

different countries, can by no means be regarded as representatives for the entire industry.

Rather, due to the limited scope of the thesis, the aim is to provide a clear picture of how

the research questions apply to the selected airlines and to establish a sound base on which

further research can be conducted.

4.2 Sample and population choice of research subject

The overall population of this research paper encompasses all globally operating

low cost carriers. The chosen sample for this comparative research study consists of three

particular low cost airlines, two European and one US-American. While the literature

categorizes Ryanair as the strictest follower of cost cuts, Southwest, on the contrary, is

presented as a role model in terms of employee relations. EasyJet, on the other hand,

cannot be easily classified in one of the two alternatives. It was selected for this study,

however, since it has been sharing a market leader position together with Ryanair in the

European low fares sector from the very beginning of its operations, both attaining the

largest amount of passengers carried (ETF 2011). Southwest is the pioneer of the low cost

23

movement and the leading budget carrier in the US4. A further essential reason for the

selection of that particular sample is the fact that representatives of both Ryanair and

easyJet traveled to Texas to learn from Southwest‘s operations in the very beginning of

their operations as a LCC (BBC 2013b). Therefore, it seems indispensable to compare the

two European low cost leaders to its forerunner.

These aspects and apparent differences make those particular airlines especially interesting

to investigate. In the following, the three airlines will be briefly presented.

4.2.1 Southwest Airlines (SWA)

Southwest Airlines was the very first low cost model on the airline market.

Founded by Rollin King and co-founded and coined by Herb Kelleher, it set up its

operations at Love Field airport at the outskirts of Dallas, Texas, in 1971. Unlike any other

airline, it has maintained profitability for 43 consecutive years (Gallo 2014) and is thereby

the only American carrier that was consistently profitable5 (Thompson, Strickland et al.

2010). Its 2013 final year net profit amounted to $754 million (Southwest Airlines 2014a).

In terms of passengers carried, SWA ranks first domestically with 115,323,000 passengers

carried in 2013.

The airline‘s destinations are still restricted by the Wright Amendment6. Through the

integration of its subsidiary AirTran, the airline is able to offer international flights as of

July 2014 (Time 2014).

SWA further received numerous awards and positive survey results: It has been ranked

repeatedly as one of the best companies to work for (Murrow 2004), received the 2014

Glassdoor Employees' Choice Award, and voted ninth Most Admired Company in the

world by Fortune Magazine (SWA Media 2014).

By the end of 2013, Southwest, which is currently led by Gary C. Kelly, had 44,831 active

fulltime employees (Southwest Airlines 2013, p.21).

4 together with JetBlue

5 Status: 2008

6 Passed in 1979 by the US government, it impedes non-stop services from Love Field airport to cities

outside the bordering states of Texas. It will be abolished by 13 October 2014.

24

4.2.2 Ryanair

Europe‘s first low cost airline was founded by the Ryan family in Dublin, Ireland in

1985, but only turned into a low cost carrier by 1990, following the footsteps of Southwest

Airlines (Ryanair 2014a). The Irish-born Michael O‘ Leary has been its CEO since 1994.

The airline is considered the most efficient low cost carrier in terms of cost level: No other

European LCC has achieved to operate at cost levels as low as Ryanair (Doganis 2006).

However, it has a long history of customer neglect (Aldous 2013). Only when shareholders

complained that ‖the company's reputation for poor customer service was limiting its room

for growth― (Reuters 2013) in fall 2013 did Ryanair attempt to improve its image by easing

its strict boarding regulations.

The airline earned the world travel award twice for ‗Europe‘s leading low cost airline‘ in

2003 and 2005 (World Travel Awards n/d).

In 2013, Ryanair‘s full year net profit amounted to €523 million (Ryanair 2014a). In terms

of passengers carried, Ryanair ranks first in the European market with 81,395,000

passengers in 2013 (IATA 2014). By 2013, Ryanair counted 9,137 employees in total

(2013, p.109).

4.2.3 easyJet

The Luton-based carrier easyJet was launched in London in 1995 by the Greek

businessman Sir Stelios Haji-Ioannou a decade after Ryanair, and contrary to its main

rival, it started directly as a low cost airline. EasyJet, currently run by Carolyn McCall,

aims at differentiating itself by operational excellence and service quality. It largely stands

out from other traditional low cost airlines as it operates from major airports.

While the orange carrier has been operating on double the unit costs of its Irish rival, it has

enjoyed a better reputation for reliability and customer satisfaction (Bamber 2009b).

Among the numerous rewards the airline achieved were the Holiday Extras Customers‘

Awards for ‘Best Cabin Crew‘ (2010 and before) and the ‗Best New Share Plan' for its

employee sharing plan in 2005 (easyJet n/d).

EasyJet ranks second among Europe‘s LCCs with 52,787,000 passengers carried in 2013

(IATA 2014). By 2013, easyJet counted 8945 employees (easyJet 2013, p. 51). By the end

of that year, the UK-based airline achieved a net profit of £398 million (easyJet 2013,

p.30).

25

Table 1: Overview of the key figures of the three airlines7

Author‘s own, based on data outlined above

4.3 Data collection

Secondary data has been used as the basis for answering the research questions,

which was complemented by additional primary data. In order to keep the research

focused, the data collection will only concentrate on the employee groups of pilots and

cabin crew.

4.3.1 Secondary data

This paper can be classified as an archival study as it will be based on documentary

research. Since this research strategy is commonly applied in the management subject area

of policy and strategy (Thomas 2004, p.61), and as it is especially applicable ―for (…)

international comparisons‖ (Saunders, Lewis et al. 2003, p.43), it is considered an

appropriate approach for this project.

For this research paper, companies‘ annual reports, documentaries and publications of

trade unions will be especially considered. The accuracy and usability of these sources are

perceived to be high, as they have been recently published. The validity is likewise

considered to be high, since the majority of the sources are renowned. In addition, the

online job-evaluation portal ‗Glassdoor.com‘8 will be considered, as it provides first-hand

opinions of the employees themselves. However, the varying amounts of review

participants need to be taken into account.

7 currency value in € (status: 20 July,2014) for comparative reasons

8 The website holds a database of six million company reviews (Glassdoor 2014a)

26

4.3.2 Primary research

In addition to the collection of secondary data, primary research in terms of semi-

structured interviews has been chosen. This is due to the perception that the mix between

the two approaches provides a solid base and additional input for analyzing the research

problem.

A non-probability method, in particular availability sampling was chosen, due to the given

time constraint. It has moreover been determined to focus on one employee group, in

particular flight attendants, for reasons of comparability.

Corresponding to the research ethics‘ principle of anonymity, the names of the interview

participants will not be published, particularly considering the professional sensitivity of

the research topic, but they will be referred to as ‗respondent‘.

In order to establish a high degree of validity under the given constraints, information

concerning their nationality, place of residence, the time and place of the interview will be

provided.

The majority of the interview questions are open-ended, in order to have the opportunity to

probe issues in depth, and as they lessen the risk of bias.

The first interview with a flight attendant of Southwest Airlines took place on

Skype, on Wednesday, 2nd

July at 03:00 p.m. Two flight attendants from Ryanair

participated in the second interview, as the main interviewee requested that a colleague

joined in the questioning. The interview took place on Skype on Wednesday, 9th

July at

07:00 p.m.

The third interview with a flight attendant from easyJet took place in writing, as the

participant preferred to respond this way. The questions were distributed via the

professional network LinkedIn on Tuesday, 22nd

of July at 09:00 p.m.

Both video call interviews were recorded and transcribed for reasons of authenticity and

validity. The written answers of the third interview were disclosed in the report word for

word.

4.4 Data analysis

In order to analyze the data collected, qualitative summarization techniques are

applied to condense the textual materials by identifying their structural properties. The

27

specific measure chosen in this case is coding contextual data with the aim to classify the

data under a category label. In particular, the chosen categories in which the secondary

data findings will be classified correspond to the dependent variables of employee relations

depicted in the conceptual model. The results of the primary research will then be

compared and contrasted to the secondary data findings of each category.

As far as the interpretation of the data is concerned, the principle of hermeneutics will be

the base for this research project, as it seeks to ―establish a reliable means of obtaining the

objective interpretation of a text‖ (Thomas 2004, p. 219).

5. Findings

In this chapter at hand, the findings based on secondary data are described in terms

of the five defined categories of employee relations, and contrasted to the results of the

primary research. The analysis and interpretation of the findings take place in the

subsequent chapter.

5.1 Corporate culture

This subchapter entails the consideration of its values, work atmosphere, leadership

and history.

5.1.1 Southwest Airlines

Southwest‘s value statement expresses: ―We operate with a Warrior Spirit, a

Servant‘s Heart, and a Fun-LUVing Attitude‖ (Southwest 2011). As outlined in a case

study on Southwest by Thompson, Strickland and co-authors (2010) (from here on denoted

as Thompson), it is precisely the two elements ‗personality‘ and ‗enjoyment at work‘ that

form the core of the airline‘s values. Even the carrier‘s location at the ‗Love Field‘ airport

was utilized to underline them. Its route connection between three Texan cities became

known as the ‗Love Triangle‘, and LUV became its trading symbol at the stock exchange.

According to Thompson (2010), the prevailing ambience at Southwest is often summarized

as the ‗Southwest Spirit‘. In particular, to enable a pleasant and respectful working

28

atmosphere, the personnel department was renamed to the ‗People Department‘, and a

‗Culture Committee‘ was established.

The authors further point at a statement published in the airline‘s annual report of 2000,

which reads ―At Southwest, people are our greatest assets (…)‖ (2010, p.C-419),

demonstrating that employees are notably valued by the airline. The author Hoffer Gittell

precisely refers to the airline‘s characteristic as ‗the Southwest Airlines Way‘, which she

describes as ―to focus on employees as a source of knowledge for reducing costs (...)‖ and

―to see employees as individually valuable‖ (cited in ETF 2011, p. 34).

The airline‘s managers particularly communicate directly with employees, and place great

importance on writing them on special occasions. The ITF (2002) further points at the

prevailing ―family spirit‖ at Southwest, which according to several sources implies that the

airline treats its employees like an extended family (Wensveen 2011, Interview 1, 5‘00‖).

To illustrate this, the interviewee reports of a gallery of photos of the employee‘s family

members in the alley (3‘00‖).

Moreover, congratulatory notes are sent to its employees if positive customer

feedback is received, while customer complaints are considered as learning opportunities

(Thompson 2010). What is more, as pointed out in The Airline Business, the airline offered

a voluntary retirement to all its employees in order to help reduce costs when it faced

financial difficulties in 2004, instead of announcing staff costs (Doganis 2006).

Besides, the corporate history underlines its corporate character and culture: In its

initial years, the carrier faced diverse legal and regulatory barriers (such as the previously

mentioned Wright Amendment) which fostered a strong team spirit among its employees,

grounded on the striving to survive and to overcome these barriers (Thompson 2010).

In a laureate to Herb Kelleher, Rol Murrow describes Southwest‘s culture as

unique, in which employees are regarded as partners, and as a reflection of the personal

values and beliefs of the former CEO. He particularly coined the airline with his

encouraging leadership style, in which he emphasized fun and enjoyment in every aspect

of the business (Murrow 2004, p. 208). Moreover, according to The Wall Street Journal, he

was ―beloved by employees‖, as he dedicated a high amount of his time to listen and chat

to the employees (Nicas, Carey 2014). Most decisively, he was a strong believer of the

principle that the employees, not the customers come first (Thompson 2010).

29

However, according to the respondent, there is a significant difference between

working in the headquarters, where this pleasant atmosphere prevails, and working in

customer service: ―(…) because headquarters is what you read about the company‖

(Interview 1, 2‘00‖). The interviewee further perceives the atmosphere to be more

―serious‖ at the moment than in earlier years, since it is currently integrating workforce

from its subsidiary AirTran, which has a different culture. In addition, the events of 9/11,

which impacted the entire industry and led to stricter regulations, also slightly impacted

Southwest‘s culture (15‘00): ―Before… they didn‘t use to get in trouble for things, they

were really big partiers‖ (13‘00‖).

In examining whether the core of Southwest‘s culture is still prevalent in 2014,

contradictory opinions have been found. A recent article published by Forbes Magazine

praises Southwest‘s management practices towards its employees until current (Gallo

2014), whereas The Guardian raises doubts whether the culture is still the same. It argues

that since Gary C. Kelly became CEO, the tone had changed. While Herb Kelleher

established open-door policies and remembered every employee‘s name, the British

newspaper reasons that, meanwhile, those doors are closed. Memos to employees became

less friendly and union negotiations tightened (Datko 2014).

On the online career community Glassdoor.com (2014b)9, employees of Southwest

voted the ‘culture and values‘ with 4.1 out of possible 5 points.

5.1.2 Ryanair

While Southwest‘s culture stresses a jovial atmosphere and family spirit, Ryanair‘s

CEO Michael O‘Leary explicitly expressed in a BBC interview: ―I think a lot of the peace

and love of Southwest is very much a cultural phenomenon in particular in the Southern

States in the US (…) that kind of shlock doesn‘t work here in Europe‖ (2013b).

Contrary to Southwest, there is no evidence that a certain ‗Ryanair Spirit‘ exists. As

stated by Box and Byus (2005) and confirmed by the researcher, Ryanair neither states a

9 The results are based on 424 participants.

30

mission nor a vision statement on its corporate website. However, a Ryanair pilot, who was

interviewed in the BBC Panorama Report ‗Ryanair‘ (2013a), describes the company‘s code

of conduct as ―drive down cost no matter what the impact is for the employee or for the

customer‖.

In particular, the fact that the airline‘s culture causes mistrust among customers, as the

BBC argues (2013a), also effects Ryanair‘s cabin crew: According to Respondent One,

flight attendants are commonly confronted with ―people‘s attitudes‖ and expressions as

―oh my God, you are Ryanair‖ (Interview 2, 13‘00‖). In her view, passengers even appear

to suspect Ryanair‘s employees to take advantage of the passengers (14‘00‖).

O‘Leary himself referred to the airline‘s culture as an ―overly macho culture‖,

according to Bloomberg (Lundgren and Doyle 2013). This is evident by his quote, as

among other sources10

cited by The Guardian: ―MBA students come out with: 'My staff is

my most important asset.' Bullshit. Staff is usually your biggest cost. We all employ some

lazy bastards who needs a kick up the backside, but no one can bring themselves to admit

it‖ (Hogan 2013).

Respondent One and a flight attendant interviewed by the BBC congruently recounted:

―We are numbers‖ (Interview 2, 14‘00‖, BBC 2013a).

Yet, according to the ITF (2004), the chairman addressed its ―highly-productive work

force‖ by thanking them for having ―again performed miracles‖ in its annual report

(Ryanair n/d). This statement is contrasted by a personal account of a Ryanair pilot, who

insists, ―the company does not respect or give dignity towards its pilots, its cabin crew or

any of its service partners‖ (BBC 2013a).

In their case study Ryanair: Successful Low Cost Leadership, the authors Box and

Byus (2005) moreover point out that the Irish carrier has been criticized for a number of

issues related to business ethics and its human resources practices.

The German pilots union Vereinigung Cockpit (VC 2014) precisely expressed

considerable concern about those practices, claiming that ―negative culture‖ Ryanair

adopts resembles attitudes from the past century and that it should be considered

unthinkable in Europe these days.

10 including Colin Shaw (2013) and The Irish Examiner (2012)

31

Nonetheless, as far as the working atmosphere is concerned, Respondent One stated

that the atmosphere among the colleagues is joyful and pleasant, depending on the base

(Interview 2, 2‘00‘,‘26‘00‖).

As published on Glassdoor.com (2014c), Ryanair received the vote 1.5 in the category of

‘culture and values‘11

.

5.1.3 easyJet

EasyJet refers to its culture as the ―orange culture‖, which was ‗installed‘ by the

airline‘s founder Haji-Ioannou. According to Financial News, it is represented by the

airlines‘ value statement ―everybody makes a difference, orange is the difference‖ (Hohler

2001). Accordingly, easyJet state in an IPO prospectus that the corporate color ‘orange‘

accentuates the value ―of all employees‖ within its ―strong and coherent‖ culture (2000,

p.15), thereby closely resembling Southwest‘s approach. Looking at the corporate website,

six distinctive values are pinpointed, namely ‗safety‘ 'pioneering, ‗one team‘, ‗passion‘,

‗integrity‘ and ‗simplicity‘ (easyJet 2012b).

Moreover, easyJet‘s website states that it is committed to a ―high performance

culture― and that it engages its employees in terms of commitment, satisfaction, advocacy

and pride (easyJet 2012a). However, a post on Glassdoor.com, published May 18, 2014,

counters: ―at time a Lack of sense of humanity at all managerial level‖ (2014d).

The Airline Business further cited Andrew Harrison, former CEO of easyJet,

describing the company‘s mission as ―low cost with care and convenience‖ (Pilling 2008).

Besides, easyJet‘s founder used to give its pilots a lift home on several occasions. In

addition, the former CEO explained that the airline‘s objective has been to create a ―happy

place to work‖ in order to benefit both its employees and ultimately its passengers (Pilling

2008). The respondent likewise recounted that ―the atmosphere is very good, the

environment very friendly‖ (Interview 3). The article ―EasyJet‘s staff make the difference‖

published by Personnel Today specifies that personal ‗Thank Yous‘ from managers as well

as regular social events are common (2002).

11 the evaluation contains 19 reviews

32

While the respondent referred to the carrier as ―our great orange family‖ (Interview 3), the

reference to a ‗family spirit‘, as prevalent at Southwest, has not been found in secondary

data.

The airline did, however, further converged to Southwest‘s culture when it

underwent a substantial cultural change by 2007. As outlined in the article Employment

relations in airlines in European varieties of capitalism, easyJet changed its approach

towards its employees from a former ‗control‘ category to a commitment approach.

EasyJet‘s director of people explained: ―At Southwest we saw that it was possible to run a

profitable low-cost airline and still have a strong people culture‖ (Bamber, 2008, p. 5).

The ETF report The development of the low cost model in the European civil aviation

industry (2011), however, calls its similarity to the Texan carrier into question. The

Federation particularly holds that easyJet still pursues a paternalistic approach. What is

more, it insists, ―neither Ryanair nor easyJet embraced the ‗Southwest way‘ where

respectful relationships between company management and unions set the tone for

respectful relationships throughout the company‖ (2011, p.20).

On Glassdoor.com (2014d), the carrier received the vote 3.8 for its ‗culture and

values‘12

. This result is more than double as high as Ryanair‘s, however it does not surpass

Southwest‘s result of 4.1.

5.2 Training and development

This subchapter looks at the conditions concerning training and development

among the selected airlines, in considering the compensation for the training program, as

well as career development opportunities.

To begin with, the ETF points out that it is a common practice to engage the cabin crew via

an agency and to self-fund the training costs (2011).

The following table provides an overview of various aspects concerned with the training

conditions among the sampled airlines.

12 The evaluation contains 24 reviews

33

Table 2: Comparison between cabin crew‘ training- and working conditions

Author‘s own, adapted from Broughton (2005).

5.2.1 Southwest

As presented in Table 2, which was originally published by the European industrial

relations observatory on-line, the employees receive lunch supplements during the initial

training, as well as a payment of US$ 1,000, given that the course is successfully

completed (Interview 1, 21‘00‖). According to the interview respondent, the compensation

was slightly higher.

As Table 2 moreover reveals, the Airport ID is reimbursed by the airline, yet the uniform is

paid by the crew member, the same case applies to the other two selected airlines as well.

The interviewee explained: ―it‘s payroll-deducted, (…) so once you start working, they

take out like 20 dollars a month (...)‖ (22‘00‖).

According to the ITF survey (2002), the training program entails a jovial atmosphere:

“Almost every new recruit is greeted personally by them, and staff training programs

encourage a humorous and informal approach (…)‖ (p.13).

As the case study by Thompson (2010) describes, Southwest has its own University for

People, which organizes training courses not only for its cabin crew but also for other

employees. The airline moreover has its own training center to train pilots (Southwest

Airlines 2014).

Among the numerous development opportunities for cabin crew are according to the

interviewee supervisory positions, working in the marketing department, customer

relations or other positions in the headquarters (Interview 1, 11‘00‖).

34

On Glassdoor.com, the category ‗career opportunities‘ received a total rating of 3.8 points

(2014).

5.2.2 Ryanair

As Table 2 demonstrates, Ryanair compensates its future employees‘ training with

lunch supplements only.

The ETF (2011), as well as the BBC (2013a) further outline that Ryanair is the only

European low cost carrier that outsources its cabin crew and pilot recruitment and training

to agencies. In particular, both sources reveal that flight attendants have to pay €2000 to

train.

As far as the pilots‘ training is concerned, The Independent reports that Ryanair‘s pilots are

charged with an initial assessment fee of £260 to interview pilots for selection (Boztas

2013). According to the BBC, pilots are promoted young, however combined with high

expectations and no dignity (2013a).

Concerning the atmosphere at the training, a personal account published in the ETF report

(2011, p.29) described that it was humiliating, as supervisors mainly aimed to intimidate

the candidates. This aspect has not been confirmed by the interviewees.

In its annual report of 2013, Ryanair stated, ―Our people know that they can advance

their careers by taking advantage of Ryanair‗s commitment to promote from within

wherever possible‖ (2013, p. 6). According to the respondents, among the career

development opportunities is the supervisory position in the cabin, just like in the case of

Southwest Airlines. However, this promotion only encompasses a marginal difference in

salary (Interview 2, 17‘00‖). Further career development opportunities include the position

of a base manager, supervisor or training instructor (18‘00‖).

On Glassdoor.com, Ryanair received a total rating of 2.1 points in the category ‗career

opportunities‘ (2014c), which is significantly lower than Southwest‘s result.

5.2.3 easyJet

Contrary to Ryanair, easyJet‘s cabin crew is directly recruited by the airline (ETF

2011). A further difference to the Irish carrier is that trainees receive a reduced salary and

35

travel allowance during the training, as well as a reimbursement for the Airport ID (Table

2). According to the respondent, the future flight attendants neither pay for the training, nor

for the allocation, which equals Southwest‘s approach. This also applies for further

training in case of a job promotion (Interview 3). In addition, congruent to Southwest‘s

proceeding, the training takes place at its own ―easyJet Academy‖ (easyJet 2012d).

Moreover, the respondent recounted that flight attendants pay 100€ each month for half a

year as a contribution to the base training, an aspect the interviewee approves of (Interview

3). The ETF (2011) revealed no complaints concerning the conditions of the cabin crew

training, contrary to Ryanair.

Concerning the pilots‘ training, however, the British carrier, like Ryanair, does not

train its pilots ‗in-house‘, but it cooperates with four different training companies (easyJet

2012c).

According to The Independent, pilots have the opportunity to become captain within six or

seven years (Boztas 2013). While the industry‘s average time to upgrade to this position is

approximately ten years, easyJet facilitates this opportunity much earlier. Likewise, the

ETF (2011) concludes that ―unlike Ryanair where it can be difficult for new recruits to

progress, cabin crew at easyJet can be promoted to cabin manager after just 1 year‖ (p. 30).

This has not been confirmed by the interviewees of Ryanair.

EasyJet received the vote of 3.7 for the category ‗career opportunities‘ on Glassdoor

(2014d), which is almost identical to Southwest‘s result of 3.8.

5.3 Compensation and rewards

This subchapter entails both non-monetary and monetary rewards, in particular

differences in wage levels and compensation schemes.

5.3.1 Southwest Airlines

In line with its culture, SWA frequently rewards its People, also in non-monetary

ways. As the interviewee reports, the airline has special employee recognition programs

for this purpose. She, for instance, recounted that a text about her was published in a

36

magazine to recognize her work. Moreover, so called ‗spirit parties‘ and day trips are

frequently organized for the entire workforce (Interview 1, 17‘00‘).

In terms of monetary compensation, Southwest‘s employees are paid by the

principle of seniority. The interviewee stated that her initial salary amounts to $US 22 per

hour, which can rise up to $US 60 after 13 years (09‘00‖and 10‘00). Contrary to Ryanair,

where flight attendants only get paid once the door is closed, cabin crew‘s salary includes

the working time on the ground and overnight stays (10‘00‖).

According to the case study by Thompson, Southwest‘s wage rates have been ―at or

near the top of the industry‖ (2010, p.C-424). Due to the fact that the airline operates in the

US market, a comparison with the European airlines does not seem reasonable. Rather, it

shall be compared to salaries within the US industry, as presented in the following:

Table 3: Overview of pilots‘ hourly salaries of major US airlines

Author‘s own, adopted from Schaal, D. (2013)

The table confirms the claims of Thompson (2010). Looking at the wage levels of

co-pilots after five years, only those employed by United and UPS receive higher hourly

salaries. Besides, SWA‘s wage level is clearly higher than those of several legacy carriers

as Delta or American Airlines.

When it comes to the total compensation of pilots and flight attendants (including

benefits), SWA has been the industry leader (Thompson 2010).

The profit-sharing program of the airline is particularly described by John Wensveen

(2011) as ―one of the employee‘s most lucrative benefits‖, seeing that the airline has

37

consistently yielded a profit since 1973 (p.436). As stated in The Wall Street Journal, the

shared profits amount to more than six percent of an employees‘ pay (Nicas and Carey

2014). Moreover, according to Murrow (2004) and Thompson (2010), employees own

about ten percent of the company stock.

Southwest received the total vote of 4.1 points in the category ‗comp & benefits‘.

5.3.2 Ryanair

Contrary to Southwest, neither secondary data nor primary research revealed the

existence of employee recognition programs at Ryanair. Its absence is highlighted by the

following interview extract (Interview 2, 2‘00‖):

Interviewer: … do you feel appreciated by the employer for the work that you do?

Respondent 1: Ahhh (laughs)

Respondent 2: Yes, definitely (laughs).

Respondent 1: No.

When it comes to monetary rewards, the following statement is found on Ryanair‘s

career site: ―We firmly believe in rewarding our people for their effort (…) you'll get a

competitive salary, excellent benefits, and fantastic opportunities to move up within

Ryanair if you work hard and impress‖ (2014b).

One particular incentive Ryanair offers its employees is unlimited discounted standby

flights on all routes (Ryanair 2014b). Respondent One related that this certain discount

amounts to seven Euros per fare for cabin crew, not implying additional airport and

security charges. The interviewee thus argued, ―… basically sometimes it‘s cheaper if you

take the normal passenger ticket‖ (Interview 2, 3‘00‖). However, she recounted that pilots

do have the opportunity to fly for free as they can use the ‗jump seat‘ in the cockpit

(4‘00‖).

Contrary to Southwest, Ryanair‘s pay level is not based on seniority, thus earning

higher wages is only possible through career development. In particular, a promotion to the

position of ‗supervisor of the cabin‘ only amounts to a wage differential of approximately

€100-200 Euros compared to the flight attendant‘s salaries (17‘00‖).

38

As far as wages are concerned, Respondent One perceives the salary to be on

industry‘s average, and adds that compared to her home country Hungary, ―I‘m earning

like a queen‖ (6‘00‖). While Michelle Lowe, a spokesperson of Ryanair advocates that its

flight attendants receive ―better pay … than at legacy carriers‖ (Braw 2014), the ETF

points out that Ryanair‘s cabin crew can earn a maximum of €1,000 per month before tax,

which is considerably lower than the average salary in Europe (2011, p. 28). In addition, as

outlined by both the ETF (2011) and the interview respondents, flight attendants do not

receive base pay13

as long as they‘re subcontracted by an agency, which is at least three

years. This stands in clear contrast to Southwest‘s employment conditions.

The BBC (2013a) as well as the authors Box and Byus (2005) further argue that the cabin

crew‘s compensation is dependent on the extent to which flight attendants achieve the

given sales target. This was not confirmed by the respondents.

As far as the wages for pilots are concerned, contradictory information where

found. While the BBC argues that its pilots are paid well (2013a), the newspaper

Handelsblatt provides a different picture: It claims that their monthly gross salary amounts

to €6,000. However, after the deduction of taxes and social charges and other expenses, the

remaining net income would at times only leave pilots with €540 for a living (Döring

2014). Accordingly, the Irish Airline Pilots‘ Association (IALPA) claimed Ryanair‘s pilots

were paid only about half the salary compared to Aer Lingus‘ pilots and still had to face

further pay cuts (Bamber and Hoffer Gittell 2012).

As pointed out by Lawton (1999), the airline became the first Irish publicly quoted

company that established a company-wide share option scheme. In the Airline Business it

is argued that Ryanair has adopted Southwest‘s approach of profit sharing in order to

reduce pressures to introduce greater employee participation (Doganis 2006).

On Glassdoor.com (2014c), Ryanair received the vote of 1.6 for the category ‗comp &

benefits‘, a result that is decisively lower than that of its American counterpart.

13 it guarantees a minimum amount of pay

39

5.3.3 easyJet

The British carrier states on its website that it acknowledges the importance of

giving rewards for performances (easyJet 2012a). Indeed, rewards also take place in non-

monetary terms. The respondent recounted, ―they often thank us for our hard job‖ (…)

especially after having gone ―the extra mile‘‖ (Interview 3). Moreover, in order to motivate

cabin crew to increase on-board sales, vouchered are offered (Interview 3).

However, appreciating employees has not always been prioritized. As outlined in

Management In The Airline Industry, the airline‘s founder famously marketed the airline as

a ‗bus company‘ in 2003, thus implying similarities in pilots‘ jobs with those of bus drivers

(Harvey 2007).

In the book Up In the Air, the author Bamber (2009b) argues that employees earn

less than at legacy carriers, yet more than at Ryanair.

Contrary to the Irish carrier, 50 percent of the cabin crew‘s salary is base pay, from the

beginning of its career, which also compensates overnight stays (Reuters 2007, Bamber

2009b).

Reliable secondary sources concerning the monthly salary of cabin crew could not be

found. The respondent, however, holds that the salary is ―very competitive and high‖, and

added that in December flight attendants would receive additional base salary for two

weeks (Interview 3). As indicated on Biz/ed.com (2012), the wage levels increase with

rising seniority. This clearly contrasts Ryanair‘s pay scheme.

According to the Independent, commercial pilots at easyJet start with ―a minimum

pay of £120,000‖ per annum (Boztas 2013), their base pay amounting to 80% (Bamber

2009b). Breaking this amount down per month, it corresponds to approximately £10,000,

which clearly contrast‘s the €6000 gross salary that Ryanair‘s captains seemingly receive.

Yet, the British union BALPA (2013) claimed in a publication that after debt repayments,

easyJet‘s pilots are left with ―less than they might earn by working in a bar‖.

Besides, as stated in easyJet‘s annual report (2013), ―over 90% of easyJet

employees are shareholders in the Company‖. Furthermore, their reward package includes

an yearly performance-driven bonus, based on the personal- and the airline‘s performance,

and the guarantee of shares (2013). However, The Guardian points to complaints raised by

40

the French pilot union SNPL, which represents easyJets pilots, for neither having profit-

sharing agreements, nor company share plans (Garside 2013).

EasyJet received the vote of 4.0 for ‗comp & benefits‘ on Glassdoor.com (2014d), which is

almost equal to Southwest‘s result.

Ultimately, the wage levels of the two European airlines shall be put in perspective.

Although no comparison of exact wage differences across European airlines was found, the

following table published by the ITF14

provides a clear picture:

Table 4: Differences in working conditions, compared to network carriers

Adopted from ITF (2002, p. 11)

While wages at easyJet appear to be slightly higher than Ryanair‘s pay scales, Table 4

points out that employees of European LCCs are disadvantaged compared to legacy

carriers in various aspects, including base pay and hourly premiums.

5.4 Level of unionization

This stage encompasses the airline‘s positions towards trade unions.

In the presentation The Coming Crisis in Airline Labor Relations & How to Avoid It, the

following positioning map of the respective airlines was displayed:

14 The survey included easyJet and Ryanair (p. 2)

41

Figure 7: Employment relations strategies

Author‘s own, adapted from Kochan, Hoffer Gittell et al. (2008)

5.4.1 Southwest

According to Southwest Airlines, approximately 83 percent of the firm‘s employees

are unionized in 2013. Thompson (2010) congruently refers to the airline as ―one of the

most highly unionized U.S. airlines‖ (p.C-424).

According to the ITF (2002) and Thompson (2010), every major worker group is

represented by an in-house trade union. Moreover, the relations with the airline have been

overall harmonious and non-adversarial, as the only labor dispute yielded in a brief strike

in 1980. Besides, the main bargaining issues concern salaries rather than working

conditions (ITF 2002).

In categorizing Southwest‘s stance on unions, Figure 7 clearly illustrates that the

carrier adopts a partnership approach, combined with a commitment strategy. The figure

furthermore reveals that the Texas-based carrier is unique in this particular position.

Lufthansa, for instance, also embraces a union partnership approach, yet it still shows a

tendency towards employee control, rather than -commitment (see Figure 7).

The respondent relates to several advantages the employees enjoy due to the

commitment of the unions, among others the guarantee of rest hours, as flight attendants

are not permitted to work more than 16 hours. Moreover, thanks to the unions, flight

attendants are compensated when they are called to work on their day off, and receive an

42

additional rest day. The interviewee ultimately reasons, ―…So that‘s why we have the

unions, otherwise there will be no control, you know?‖ (Interview 1, 08‘00‖).

However, a recent article published by The Guardian calls the airline‘s partnership

approach into question, arguing, ―significant cracks have emerged in the previously cordial

relationship between Southwest and its union‖. The article‘s author Datko (2014) speaks of

tense and ―unusually sticky‖ negotations, as Southwest was pushing to replace full-time

positions with part-time workers in order to obtain more flexibility. The Wall Street

Journal even refers to SWA‘s demands as ―the biggest contract changes ever for

employees‖ (Nicas, Carey 2014).

5.4.2 Ryanair

Numerous sources outlined the fact that Ryanair unambiguously embraces a strong

anti-union stance, which is often referred to as “aggressive” (Bamber 2009a, Hunter 2006).

This is especially striking considering the fact that Ireland, the country where it is based,

strongly supports trade unions (Box and Byus 2005).

Looking at Figure 7, it becomes clear that Ryanair is unique in its positioning of

union avoidance on the one hand, and exercising control towards its employees on the

other. In particular, according to the european industrial relations observatory on-line,

Ryanair is the only European company that consistently refuses to grant formal recognition

rights to trade unions (Broughton 2005). This is underlined by the following table

presented by the ITF (2002).

Table 5: Union recognition

43

Adopted from ITF (2002, p.9)

In spite of the prohibition to form or join unions by the Irish airline, Ryanair’s

pilots formed a union themselves, the Ryanair Pilot Group (RPG). According to their

website, more than 50% of the carrier’s pilots have joined the association, which was

established only recently in 2012 (RPG 2014). As stated by Vereinigung Cockpit (2014)

and RPG (2014), Ryanair continuously refuses to accept the representatives of the pilot’s

association, as well as to guarantee legal security for pilots engaging in it. Thus, pilots that

actively participate in the pilots group cannot be certain that there job is not at risk.

Instead, Ryanair prefers to deal with so-called “Employee Representative Committees”,

which according to VC (2014) have not been openly elected and merely represent a

fraction of Ryanair’s employees.

In reference to the lack of union representation, Respondent One argued that ―(…)

we would need (…) to have, because sometimes, we are not protected, (…) if we get sick,

(…) we don‘t get any money‖ (22‘00‖).

To conclude, Ryanair decisively contrasts Southwest‘s union stance, as underligned

by its contrary positions in Figure 7.

5.4.3 easyJet

Contrary to Ryanair, easyJet does recognize unions, as presented in Table 5.

However, in contrast to Southwest, its employees are not represented by in-house unions,

but by general transport unions of the respective country, such as the British union

BALPA, or the French SNPL. EasyJet particularly embraces an ‗accommodation‘

approach, which tends to be closer to employee commitment than to employee control

(Figure 7). If one drew a diagonal line between Ryanair‘s and Southwest‘s position on the

illustration, easyJet would appear almost centrally between the two, as demonstrated

below:

44

Figure 8: Position towards employees and unions of the sampled airlines

Author‘s own, adapted from Kochan, Hoffer Gittell et al. (2008)

Thus, in contrast to its American counterpart, easyJet neither partners with unions,

yet also does not avoid them, distinguishing from Ryanair. It moreover does not embrace a

control approach towards employees, but neither fully engages in employee commitment.

This position is amplified by the ETF report (2011) which states that ―the need to secure

the commitment of the workforce does not extend beyond an ‗accommodation‘ with trade

unions‖ (p. 32).

After all, while Southwest has adopted a partnership approach from the very

beginning, easyJet only had to deal with unions by the end of 1999 in consequence of the

Employment Relations Act which was passed in Great Britain (ETF 2011). What is more,

it only distanced itself from the ‗avoid category‘ of union relations by 2007, according to

Bamber (2009b), and even vehemently opposed the recognition of BALPA before the law

was passed (Harvey 2007). On top of its late amelioration in union-relationship, if one is to

believe the ETF (2011), easyJet has expressed hostility towards workplace representatives

and union officials.

However, according to Bamber (2008), by 2008 the pilot unions perceived that the

carrier‘s stance on unions was closer towards a partnership approach compared to British

Airways, in spite of being a low cost airline. The respondent perceives that unions ―did a

great job for easyJet's employees‖ in the past, yet not at the moment (Interview 3).

45

The ETF (2011) concludes that although easyJet‘s approach is more favorable than

Ryanair‘s, both airlines fail to match the social partnership relations applied by a number

of European legacy carriers, as well as by their forerunner Southwest.

5.5 Working conditions

The Guardian points out that low cost carriers are not only setting the trend for

worsening working conditions concerning their employees, but also for legacy carriers

(Braw 2014).

Besides, the ETF (2011) denotes that although different models of LCCs exist, they all

heighten the pressures on turnarounds, employee‘s productivity and on the services to

passengers. This already became apparent from Table 2 (in chapter 5.2). Moreover,

flexible contracts, -rosters, as well as non-direct employment via agencies were

increasingly becoming the norm among European LCCs.

This subchapter describes the prevailing working conditions of pilots and flight attendants

among the selected airlines, including contract types and the aspect of job security.

5.5.1 Southwest

―Nothing kills your company‟s culture like layoffs. Nobody has ever been

furloughed here, and that is unprecedented in the airline industry (…)‖ (Herb

Kelleher, cited in Thompson 2010, p. C-425)

As visible from the quote, Southwest pursues a no-layoff policy. The Wall Street

Journal confirmed that the carrier had neither dismissed employees, nor cut wages in its

history (Nicas, Carey 2014).

The interview respondent perceives that in evaluating the level of job security, the history

of the airline including its growth plays an important role. Although she concludes that she

feels secure in that respect, she indicates that an absolute security cannot be guaranteed in

light of the nature of the industry (Interview 1, 23‘00‖).

The competitive nature of the industry does indeed seem to show its effect even on

the ‗role model airline‘. As the ETF (2011) points to a trend towards more flexible

contracts within the European sector, this has recently also become an issue for the

46

American carrier: According to The Guardian, the foundation of Southwest is grounded on

‗career jobs‘ entailing full-time contracts that provide security and medical coverage for

families. In current negotiations with unions, however, the airline seeks to replace 40% of

those contracts with part-time workers, which would not enjoy the same benefits (Datko

2014).

Moreover, in order to continuously improve labor productivity, (Nicas and Carey 2014),

the carrier seeks to shorten turnaround times to obtain high on-time performances. This

inevitably affects flight attendants. While Thompson argues that employees took pride in

fulfilling this task due to the prevailing esprit de corps (2010, p. C-428), the respondent

pointed out that precisely this practice increases the stress level: ―if they keep cutting it,

cutting it, cutting it, (...) it creates a lot of stress‖ (19‘00‖). She moreover added that the

turnaround time used to be reduced to ten minutes, and that the airline had recently been in

the media for its practice (20‘00‘). This pressure on turnarounds corresponds to the

findings of the ETF report (2011), as outlined above.

Secondary data including press releases of Southwest Airline Pilots‘ Association

(SWAPA) hardly provides information concerning the working conditions of the pilots, in

clear contrast to Ryanair. According to the authors of Introduction to Air Transport

Economics though, SWA‘s pilots are assigned with additional tasks such as cleaning the

aircraft or carrying bags, together with flight attendants. In addition, they also fly more

hours per month than other pilots in the US airline industry (Vasigh, Fleming et al. 2008).

On Glassdoor.com (2014b) 87% of the review participants stated they would recommend

this company to a friend.

5.5.2 Ryanair

“Basically everything goes from our pockets.” (Respondent Two, Interview 2,

23‘00‖)

The Guardian cites Michelle Lowe, Ryanair‘s director of communications, claiming

that its flight attendants benefitted from better schedules, -pay, -promotional opportunities

and -job security compared to FSNCs, which were cutting costs and wages. Moreover, she

holds that the airline offered great conditions as well as secure jobs (Braw 2014). This

47

statement, which is further expressed in Ryanair‘s annual report (2013, p.6) stands in

direct contrast to the argument of Thomas Lawton; in his paper The Limits of Price

Leadership he points out that ―Ryanair directly targets (...) labour for continuous cost

reduction‖ (1999, p. 578f), in contrast to Southwest.

In the article A Tale of Two Airlines, the authors Bamber and Hoffer Gittel (2012)

moreover allude that Ryanair follows a high-stress approach, implying long working hours.

They further specify that ―cabin crew could work 27 days in a row without a day off‖

(2012). This has not been confirmed by the respondents.

Referring to the trends initially outlined by the ETF (2011), such as flexible

contracts, -rosters, as well as ‗non-direct‘ employment, Ryanair seems to represent them

all.

In fact, half of the crew is employed by an agency (BBC 2013a), and no base pay is

granted. Thus, flight attendants are not compensated if they are injured or on sick leave

until they are under contract by Ryanair. This is only an option after a minimum of three

years (Interview 2, 14‘00‖-15‘00‖). The BBC cited a flight attendant who was told he

could not receive a Ryanair contract since he ―did not reach the target yet‖ (2013a).

The ETF (2011) argues that this ―temporary, agency and contract labor‖ essentially signals

insecurity for the employee (p.24). However, Respondent One perceives it very difficult to

be laid off by the Irish carrier: ―I mean to get out from Ryanair you really have to be bad

… like, very bad …‖ (Interview 2, 20‘00‖).

Moreover, primary research revealed numerous further issues. Flight attendants are

not insured in the country of their base due to their Irish contract (23‘00‖). While

Ryanair‘s crew is assigned to bases across various European countries, neither flight

attendants nor pilots can chose the country (VC 2014), and language skills are not taken

into account: ―Ryanair just throws you wherever they need you, you know?‖ (Respondent

Two, 22‘00‖). As a result, a significant number of the carrier‘s employees live in countries

where they do not speak the local language. This contrasts easyJet‘s policy, which only

assigns flight attendant to a country if the person possesses fluency of the respective

language (Respondent Two, 22‘00). In consequence, Ryanair‘s cabin crew pays varying

amounts of taxes and charges, depending on the country, thus making their net income

dependent on this selection. The same issue applies for pilots.

48

What is more, the respondents confirmed the statement of BBC (2013a) that both cabin

crew and pilots have to pay the exact same amount for food and drinks as the passengers

(4‘00‖). Pilots even have to pay for a glass of water.

Apart from this, the long list of unfavorable working conditions for pilots is striking.

Not only Ryanair‘s pilot association RPG comments on the conditions (2014), yet also the

German equivalent VC, Bloomberg, the Independent, the ETF and ITF, Financial Times

and other sources.

To start with, the ETF estimates that three quarter of Ryanair‘s pilots are employed

through an agency (2011) to keep staff cost down (BBC 2013a). The newspaper

Handelsblatt points at a specific problem that this entails: Pilots are apparently required to

form their own company with other colleagues, a condition that the VC refers to as sham

self-employment („Scheinselbstständigkeit‟) (Döring 2014). In consequence, pilots are

obliged to pay both the security charges as an employee and as an employer, which

explains the resulting low net income outlined in chapter 5.3.2 (Döring 2014, RPG 2014).

Moreover, according to the BBC (2013a), Ryanair‘s pilots may have up to six flights a day,

with only 45 minutes of preparation, which they are required to complete ―in their own

time‖.

Besides, the RPG revealed further issues based on a survey including 1,100

participants at the ILA Berlin Air Show in 2014, as listed below (2014)15

:

Pilots are threatened with redundancy if they do not accept unpaid leave, or

apply for base transfers

There is no security of employment due to constant uncertainty of income and

of social security

All costs and expenses are carried by the pilots

Working on stand-by duty is not compensated

There is no pay while on sick leave

15 The list is not complete, due to the limited scope of this paper

49

Moreover, it was repeatedly highlighted by the media that Ryanair‘s pilots do not

feel comfortable with raising safety concerns to management in fear of risking their job

(Parker 2013).

In consequence of the prevailing conditions, 72.6 percent of the surveyed pilots indicated

they are planning to leave the company (VC 2014). This almost equals the percentage of

Southwest‘s employees that recommend their company as a place to work (Glassdoor

2014b).

On Glassdoor.com (2014c), only 13% of review participants would recommend this

company.

5.5.3 easyJet

Secondary data research revealed that a high workload and long working hours, as

previously stressed by the ETF (2011), have been an issue at easyJet as well. This has been

confirmed in various postings on Glassdoor.com (2014d), among others as expressed by a

flight attendant on July 17, 2014: ―Some very challenging working hours - long days‖. Yet,

this was not confirmed by the respondent. He perceives that the airline offers him good

future opportunities and believes the level of job security to be very high (Interview 3).

The author Bamber (2009b) likewise perceives that job security has not been an issue at

easyJet, in contrast to Ryanair.

The ETF (2011) further revealed that contrary to the Irish airline, the Luton-based

carrier employs its cabin crew directly on fixed term contracts. However, the ‗non-direct

employment‘ still applies for its entrant pilots.

A further parallel to Ryanair can be seen in the fact that its cabin crew and pilots are not

compensated while on stand-by duty, as indicated by a post on Glassdoor.com (2014d) on

May 6, 2014. Moreover, the initial reference to the high workload applies as well to the

working conditions of pilots (Harvey 2007). According to Bamber (2009a), a comparative

study in 2002 found that easyJet‘s pilots had a lower level of job satisfaction and a higher

level of turnover compared to five other British airlines.

However, little information is provided on the recent conditions, considering that the

carrier has ameliorated its employee relations in 2007 (Bamber 2009a). Yet, The Guardian

50

reports of a recent threat of strike by easyJet‘s pilots in demand for better working

conditions and profit sharing (Garside 2013).

What is more, a statement by Reg Allen, Head of Industrial Relations at BALPA (2013),

indicates that diverse similarities to the situation of Ryanair‘s pilots exist: EasyJet likewise

employs their pilots by a third party for at least two years, before they have the option to

receive a direct contract by the airline. In particular, the agency employs them on a zero-

hour contract, signifying that no particular number of working hours is guaranteed. As sick

pay is also excluded, easyJet‘s pilots do not have a stable income either, until they become

permanent employees.

Ultimately, the rating on Glassdoor.com (2014c) shows that 84% of employees

would recommend this company to a friend, which is almost equal to the results of

Southwest, yet multiple times higher than those of Ryanair.

6. Analysis and discussion

In order to answer the research questions, this chapter analyzes the findings

previously presented in consideration of the conceptual model, and further discusses in

how far the predicted interrelations between the variables hold true.

6.1 The effects of the business model on employee relations

The example of Southwest Airlines demonstrates that the corporate culture is not

dependent on the cost leadership business model: The culture of the US- carrier is

grounded on strong values, high appreciation of employees as well as on a fun and familiar

atmosphere. Nonetheless, the example of Ryanair displays that the business model and its

focus on cost reduction can decisively influence the airline‘s culture. This is particularly

expressed by the high emphasis on productivity, and management‘s neglect of recognizing

the work of its employees. In adopting a similar approach to Southwest, easyJet

exemplifies that an alternative culture is possible, even in Europe.

As outlined in chapter 2.4, Holloway‘s reasoning (2002) that values are largely

influenced by its history and ownership was confirmed by the selected airlines.

Southwest‘s values have been established and fostered at the very beginning of its

51

operations. In addition, its culture is decisively coined by its former CEO Kelleher, to the

same extent as Ryanair‘s culture is strongly influenced by O‘Leary. Similarly, easyJet‘s

founder also marked the airline‘s culture, albeit not as evidently.

Moreover, Ryanair‘s culture is unambiguously based on thrift and frugality, as Thompson

(2010) suggested.

Ultimately, the claim of the author Gallo (2014) that value statements are frequently not

reflected in daily business operations is clearly dissented by SWA and easyJet.

When it comes to training and development, the findings made clear that

Southwest‘s personnel are not affected by the business model. Training is financially

compensated and a number of career opportunities are accessible to all employees.

Concerning Ryanair‘s workforce, though, it does have visible implications, since training

is outsourced and associated with high cost. In the case of easyJet, the consequences of the

business model vary among pilots and cabin crew. The former are more strongly affected,

as their training is outsourced. Cabin crew‘s training, on the other hand, is compensated

and takes place in-house.

In terms of compensation and wages, the effects on employees vary significantly

among the airlines. SWA‘s pilots are paid above the industry‘s average, their salaries

partly surpassing those of legacy carriers. While it is ambiguous whether the same applies

for its cabin crew, their wages certainly increase with years of service, and include labor

time on the ground, in contrast to the other selected airlines. Its workforce moreover

benefits from the company‘s profit sharing program and stock options, which was outlined

by Doganis (2006).

Ryanair‘s wage policies, on the other hand, are evidently influenced by the business

model. Moreover, they contradict Wensveen‘s (2011) point of view that wage levels

should reflect the nature of the operations and complexity of the job. This is clearly not the

case for Ryanair‘s pilots. Besides, the varying amount of social charges and taxes among

countries, as highlighted by Doganis (2006), turned out to play a significant role for its

employees: The interview respondents are precisely affected by the higher social charges

in Belgium that were exemplified in chapter 2.3.1.

EasyJet‘s workforce is also affected by the business model, as wages are lower than those

at legacy carriers.

52

While both European LCCs adopted performance-related pay, it can be argued, however,

that they apply it to justify lower (or no) basic salaries, as outlined by Doganis (2006).

Southwest, in contrast, further regards it as a means to establish positive employee-

relations.

As far as the union relations are concerned, Southwest demonstrates that the

business model does not necessarily affect this variable. Despite a recent disagreement

with its unions, it has maintained a partnership approach, implying peaceful cooperation

from the very beginning of its operations. The case of Ryanair, however, elucidates that the

cost leadership strategy facilitates union avoidance, to fully implement low cost structures

on all aspects of employee relations. Consequently, the lack of unions is strongly apparent

in the working conditions: The airline is given no limitations of imposing high workload

on employees, and complaints of pilots or cabin crew fall on deaf ears. EasyJet initially

also seized the opportunity to largely avoid unions, yet eventually recognized that

accommodating them is essential to improve employee relations. Although employees are

mainly backed by representatives, the situation is still far from matching Southwest‘s.

The ultimate variable working conditions clearly reflects implications of the

underlying strategy among all three airlines, although its effects are less critical in the case

of Southwest compared to its European counterparts. Therefore, Doganis‘ (2006)

viewpoint concerning an increasing workload and more flexible working conditions,

combined with performance-related pay holds true for all three airlines.

The repercussions of the business model on Southwest‘s workforce are characterized by a

higher amount of working hours, deviating tasks (such as cleaning) and pressure to reduce

the turnaround time. However, it can be argued that the airline‘s employees benefit from

job security, contrary to their counterparts at Ryanair. The effects of the business model on

the conditions for both employee groups are tremendous, underlined by the long list of

issues presented in the findings. Ultimately, although easyJet‘s personnel are not

disadvantaged in terms of job security, they face a high workload.

In conclusion, the prevailing industry trend of adopting cost reduction as a

continued strategy, as foreseen by Doganis (2006), has been affirmed by the research. Yet,

the extent to which the variables are affected varies strongly among the airlines. As the

research revealed, only one variable, namely ‗working conditions‘, is entirely dependent

53

on cost leadership, since the effects are clearly evident among all three airlines.

Concerning the other variables, Southwest proves that they are not negatively affected by

the business model. Rather, it can be argued that it is a matter of choice in how far the

airline implements cost savings in the respective components of employee relations.

Therefore, the assertion of Thompson and Martin (2005), who hold that the cost leadership

strategy does not automatically entail that employees necessarily receive lower rewards has

been affirmed by the research.

Ultimately, it shall be taken into consideration that the implications of this

continuous strategy go beyond the workforce of LCCs. To keep up with the downward

spiral of cost reduction, employees at legacy carriers also experience the effects.

6. 2 LCC management‟s stance on employees

The varying implications of the business model on employee relations among the

airlines can be further explained by examining the management‘s respective attitudes

towards its workforce.

Concerning Southwest, employees are undeniably highly valued. The author Hoffer Gittel

accurately described the airline‘s stance as ―to see employees as individually valuable‖. In

particular, Southwest‘s attitude towards its workforce is congruent with Wensveen‘s

(2011) perception that employees are the greatest asset of a company. What is more, the

airline contrasts Porter‘s (1980) highly recognized view that the customer is the most

important stakeholder of the firm, as Southwest strongly advocates that employees come

first, not the customer. Moreover, the fact that the airline perceives its People as partners

(Murrow 2004) is congruent with Doganis‘ (2006) recommendation that employers should

view its personnel as partners, rather than adversaries. Ryanair, on the other hand, indeed

exemplifies the latter. This is evident from the carrier‘s vehement battle against union

recognition and as unambiguously expressed in O‘Leary‘s controversial quote in which he

refers to its employees as ―some lazy bastards‖ (Hogan 2013). The findings thus confirmed

that the airline follows a command-and-control approach (Bamber 2009a).

Moreover, the carrier precisely regards its cabin crew as sales people, since ’reaching the

target’ is an essential criteria for evaluating their performance (BBC 2013a).

54

Whether the same applies for easyJet is debatable, as the airline also incentivizes

on-board sales and commissions. What distinguishes them from Ryanair, though, is that

the value ‗care‘ is obviously important when it comes to employee relations (Pilling 2008,

Respondent). While the author Bamber (2009a) argued that easyJet had recently also

adopted Southwest‘s high-road approach, it can be argued that this only holds true to a

lesser extent.

Besides, the cost reduction strategies outlined by Bamber (2009a) (chapter 2.3.1) underline

the arguments. While Ryanair‘s cost reduction strategy implies paying low wages and

avoiding unions, both Southwest and easyJet increase labor productivity instead.

Ultimately, Figure 8 clearly illustrates the positions the airlines take towards their

employees. All aspects considered, Southwest fulfills the employee commitment category,

Ryanair the employee control category, while easyJet is positioned in between the two

opposing approaches.

In conclusion, the cases of Southwest and largely easyJet demonstrate that the level of

appreciation is not dependent on the business model.

6.3 Determining the employee‟s job satisfaction

“I really like my job, it‟s just the employer I don‟t like” (Interview 2, Respondent

Two, 26‘00‖).

To begin with, the lack of data concerning the working conditions of Southwest‘s

pilots, compared to the immense amount of information available concerning those of

Ryanair is highly indicative. In examining the pilots‘ job satisfaction, one can once more

turn to Herzberg‘s Two-Factor Theory, as explained in chapter 2.6.

Looking at the extrinsic factors of Southwest‘s pilots, no significant shortcomings

were determined. Thus, except for a few minor issues, the hygiene factors are overall

fulfilled, and the base for job satisfaction established. If one now considers the

motivational factors, it explains why a high amount of Southwest‘s employees are

satisfied. Southwest precisely appears to fulfill all motivational aspects pinpointed by

Pattanayak (2005) to a high extent: It has a strong culture, enables continuous learning,

55

delegates and empowers its personnel and highly demonstrates its appreciation towards

them.

This is a different case for Ryanair. Its pilots, for instance, lack job security, they

have no stable income, their relation to management is based on control, and their salary

appears far from adequate. Hence, the extrinsic factors are lacking. What is more, its

cultural values are not in favor of its employees, training is costly, delegation and

empowerment are unheard of, and appreciation and recognition are likewise absent. Thus,

the Two-Factor Theory can explain why a strikingly high number of pilots are dissatisfied

with their situation.

Applying Herzberg‘s Theory to easyJet is not as straightforward. The fact that the pilots

contemplated a strike to achieve better working conditions by 2013 indicates that the

situation did not significantly improve since the survey results of 2002. Provided that the

indication of long working hours, no base pay in the initial years of their career, and a net

income that is ―less than (…) working in a bar‖ holds true, significant hygiene factors are

absent as well.

What is more, whether or not pilots feel appreciated cannot be clearly answered: While

their jobs have been compared to the position of a bus driver by the airline‘s founder, the

latter on the contrary, gave them a lift home after work.

In examining the job satisfaction of the respective flight attendants, the answers of

the respondents will be considered. The gap between the pilots‘ job satisfaction among the

respective airlines appears significantly smaller concerning cabin crew. On a scale from

one to eight, the interviewee of Southwest evaluated her job satisfaction with eight out of

eight points (Interview 1, 24‘00‖). The respondent of easyJet likewise expressed that he

loved his job and the company (Interview 3), while the Irish carrier received seven points

by the respondents, due to the job itself and the pleasant work atmosphere among

colleagues (Interview 2, 25‘00‖-26‘00‖). However, the contentment with their work

experience is comparably lower due to the employer, as indicated in the initial quote.

It can be concluded that job satisfaction is dependent on the extent to which the cost

leadership strategy affects employee relations. Hence, Southwest particularly demonstrates

that although implications on working conditions prevail, its employees are still satisfied

with their job due to the significant amount of recognition received. The case of Ryanair,

56

in turn, elucidates that implementing cost cuts in all components of employee relations

negatively affects the job satisfaction.

6.4 In how far is the Southwest Model transferable to European LCCs?

“Why don‟t more airlines learn from Southwest? If other airlines were to follow

Southwest‟s example, really trying to engage their staff and partnering with their

unions, they could provide a better service to their passengers and be more

profitable.” (Anonymous UK pilot, cited in Bamber 2009a, p.24)

Southwest Airlines arguably stands out from other LCCs as it succeeds to run the

low cost business model profitably throughout its history while maintaining exemplary

employee relations.

Its European counterpart Ryanair, on the contrary, has been the most profitable European

LCC until recently, while neglecting employee‘s interests. Hence, two questions arise:

Is it necessary to adopt Southwest‟s employee-relations approach in Europe?

Can Southwest‟s culture and its way to conduct business entirely be adopted by

European carriers?

First, there are indications that the European low cost market strives towards maturity

(Doganis 2006). Thus, differentiating an airline‘s brand will become increasingly

important. By treating its own employees poorly, though, it is highly unlikely to gain

satisfied customers (Holloway 2002) and a memorable reputation, which Ryanair

exemplifies. What is more, the fact that 72.6% of its pilots, one of its most important

employee groups, intend to leave the company (VC 2014) illustrates the necessity to

consider the well-being of an airline‘s workforce.

This was indeed recognized by easyJet, albeit a decade after it started operations. The

author Bamber (2009b) argues that the carrier can lately be counted among those outside

the US that adopts Southwest‘s HR practices.

Hence, to answer the second question, it is primarily a matter of choice. Ryanair explicitly

chose not to adopt this particular aspect of its forerunner, which is evident from O‘Leary‘s

assessment that Southwest‘s ‗peace‘ and ‗love‘ can be attributed to a cultural phenomenon

57

and would not work in Europe (BBC 2013b). It can be maintained that Ryanair did not see

a necessity to adopt the pioneer‘s culture apart from its operations.

Yet, although the Luton-based carrier largely imitated Southwest‘s culture, it does not

come across as authentic as the latter. This is primarily due to the fact that easyJet only

recently discovered the emphasis on employees, in contrast to Southwest, where it is

deeply rooted in its culture. Moreover, pilots had initially been compared to bus drivers.

What is more, the fact that the airline only ameliorated its union relations after the enacting

of a law which made union recognition obligatory calls into question, whether this would

have happened otherwise. Ultimately, easyJet neither considers the emphasis on employees

in all areas, nor places its personnel before customers.

To conclude, adopting Southwest‘s HR practices is possible to some extent. In

order to do so successfully, they should be implemented from the very beginning, and

incorporated in all aspects of the business operations.

As it is commonly argued that the pioneer‘s way to conduct business precisely presents

Southwest‘s competitive advantage (Miles and Mangold 2005), this would not be the case,

if it could be easily imitated.

Moreover, it can be argued that specific characteristics and circumstances contributed to

Southwest‘s identity. The fact that it initially had to overcome regulatory obstacles

decisively coined the prevalent ‗warrior spirit‘ and makes it therefore unique. In addition, a

country‘s culture, as pointed out by Holloway (2002), does influence a company‘s way of

conducting business. For instance, company-wide recognition programs are not as

established in Europe as in the US. Apart from that, American and European cultures

assign varying importance to certain values (as indicated by O‘Leary).

Nonetheless, appreciating employees is not a unique feature that cannot be copied.

Moreover, Southwest‘s business practices of empowering its workforce and incorporating

a pleasant work atmosphere can indeed not only be transferred to any other airline

worldwide, yet also to any company operating on the cost leadership principle.

6.5 Managerial implications

“(…) it costs no more money to treat people well than it does to treat them badly."

(Andrew Harrison, former CEO of easyJet, cited in Pilling 2008)

58

Jeffrey Harrison‘s assessment (2003) that a company might go too far in the

process of implementing the cost leadership strategy and thereby endangers customers and

employees precisely applies for Ryanair. As the interviewees recount, passengers mistrust

them and they are frequently confronted with accusations and discourtesy. Thus, the

negative reputation of the airline makes it hardly possible for cabin crew, however friendly

they are, to contribute to customer satisfaction and thus to a competitive advantage.

The respondents pointed at a further issue that could prove to be problematic in

terms of safety, namely the fact that its crew potentially does not speak the language of the

country where it is based. In the event of an emergency, cabin crew would not be able to

communicate with local ambulance or authorities. This issue could easily be avoided if

attention was paid to language skills, when assigning flight attendants to a base, as easyJet

does. As a side effect, greeting and communicating with passengers in their native

language is a simple first step in connecting with passengers, and facilitates customer

satisfaction.

Moreover, if Ryanair‘s pilots go through with the intention to leave the company,

as pointed out in chapter 5.5.2, it jeopardizes its entire business operations. Thus,

Holloway‘s (2002) prediction that adversarial labor relations implicate negative

consequences in the long run eventually affects the Irish carrier. After all, improving

relations towards its workforce could start with a simple gesture of offering free water to

pilots and cabin crew.

Ultimately, the case of Southwest seemingly produces a win-win situation: In

creating a pleasant work atmosphere, flight attendants and front-line employees in all

likelihood tranfer this atmosphere to passengers, evident by their high rankings in

customer satisfaction surveys.

In order for easyJet to clearly differentiate itself in Europe through its employees, it should

position itself more coherently towards a partnership approach, and clearly implement the

latter in all aspects of employee relations.

In conclusion, whether or not a competitive advantage can be obtained does not

depend on the business model, but rather on the company‘s level of appreciation for its

own workforce.

59

7. Conclusion

The cost leadership strategy is widely employed by companies in various industries.

Centered on efficient cost reduction as a means of achieving competitive advantage, the

business model has become particularly relevant in the airline industry, as low cost carriers

proved to be the means to profitably operate in the highly competitive industry.

Therefore, the research study investigated the implications of the strategy for employees in

this particular sector, based on the examples of Southwest Airlines, Ryanair and easyJet.

While academic papers highlight the need to reduce cost in order to remain

profitable, discussions rarely examine its implementations for employees among different

airlines. Thus, the aim of the thesis was to find out (1) to what extent employees are

affected by the focus on cost cutting, in particular in terms of employee relations and job

satisfaction. To determine the effects on the former, the focus has been narrowed down to

‗corporate culture‘, ‗training‘, ‗compensation‘, ‗unionization‘ and ‗working conditions‘.

Since the pioneer Southwest Airlines has maintained outstanding employee relations while

operating on cost leadership, an additional aim was to explore (2) whether Southwest

Airlines‘ approach can be adopted by European low cost carriers.

Qualitative research has been chosen to answer the research questions. Particularly,

a comparative approach was applied to determine the different implications among

airlines. The data collection was based on secondary data, in combination with additional

primary research in the form of interviews.

The findings revealed that the factor ‗working conditions‘ is the only variable that

is clearly influenced by the business model in the case of all three airlines. The extent to

which other components are affected varies strongly among the carriers and determines the

employee‘s job satisfaction.

It can therefore be concluded that the cost leadership strategy facilitates the

implementation of low cost structures in all components of employee relations, as

exemplified by Ryanair. Yet, the research disclosed that its extent depends on the value

management assigns to its own workforce. The job satisfaction among Southwest‘s

employees, in spite of facing implications of the business model in their working

conditions, can therefore be explained by the high amount of appreciation they receive.

60

Southwest‘s human resource practices can be largely transferred to European

Airlines, as easyJet has widely adopted them. In order to differentiate itself through its

employees, though, appreciation of the workforce needs to be apparent from the very

beginning and in all aspects of employee relations. However, Southwest‘s core remains

unique, as its work atmosphere has been shaped by precise circumstances and its

geographic location.

This research study has thus clarified which aspects of employee relations are

necessarily affected by the business model and demonstrates that airlines operating on the

same business model present significantly different approaches towards its employees. The

study further provides precise information concerning the work experience of personnel

among the selected airlines, amplified by first-hand information by the interviewees. It

additionally highlights the consequences for management of the lack of appreciation, as

exemplified by Ryanair, and demonstrates that appreciating employees is not necessarily

associated with high cost, based on the examples of Southwest and easyJet. Moreover, it

points out that Southwest‘s role model position has limitations, indicating that the work

climate slightly deteriorated since Herb Kelleher retired.

The study ultimately revealed that the management‘s stance on employees largely

determines employee relations, rather than the business model.

Nonetheless, there are limitations to the study. Due to given time constraints, the

research is based on three airlines, and the results center on two employee groups only.

Therefore, the findings can by no means be generalized on the entire airline industry.

Likewise, it has to be taken into consideration that interview responses are always

subjective, and that the number of respondents representing one employee group is not

sufficient in order to draw generalized conclusions for the entire workforce.

A specific problem encountered in conducting research was that the available secondary

data varied strongly among the airlines. In consequence, at times secondary data sources

with uncertain validity were considered.

Therefore, this study should be primarily considered as a solid base upon which

further research can be conducted. In particular, in order to obtain results that can be

generalized; the extent of the research should be increased by including a greater number

61

of airline samples either within a certain continent or globally. Moreover, further research

methods could be applied, such as a survey. In addition, the correlation between the cost

leadership strategy and the working conditions among different LCCs could be determined

by statistical analysis.

Further research could investigate the specific effects of the adaptions of FSNCs towards

the cost structures of budget airlines for its employees.

Ultimately, this research study could be conducted within different industries, to examine

whether the implications of the cost leadership strategy vary among sectors.

62

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71

Appendix

Interview questions:

1) How long have you been working for the airline16

?

2) How do you perceive the working atmosphere?

3) Do you feel appreciated by your employer for the work you do?

-imagine a scale from 1 to 8 (8 being the best)

If yes: how does the employer demonstrate appreciation and what is done to motivate

staff?

4) Do you notice an effect of the business model based on cost reduction in any way of

your work experience?

5) Did you pay for the training and your uniform or was it reimbursed by the company?

6) What opportunities for a job promotion (and further training and development) do you

have?

7) How do you perceive the level of job security?

8) In how far do the unions advocate for the employees?/ Do you see benefits from it?

9) If you could rate on a scale form 1 to 8 (8 being the best), how satisfied are you with

your job?

What are the reasons?

(10) Would you recommend the airline to others?17

The interviews

Interview 1:

Transcription of the interview with a flight attendant of Southwest Airlines, held on Skype

on Wednesday, July 02, 2014, at 3:00 pm

16 to be substituted by the respective airline

17 only asked in the first interview, then omitted due to similarity to previous question

72

Respondent: Mexican-American, female, 24 years of age, based in Texas. Flight attendant

at Southwest for 2 month, prior work in the airline‘s call centre and internship in

headquarters

(Warming up)

(Minute 0‟00”)

Respondent: And, uh... I started with Southwest right after College, uhm, as an intern,

Interviewer: Ok-

Respondent: …so I was an intern for the headquarters. They had … you know they had

their headquarters…

Interviewer: In Texas, right?

Respondent: in Texas,

Interviewer: Yes-

Respondent: …in Texas, aha.

Interviewer: At the Lovefield airport, is that it?

Respondent: Yeah yeah yeah! You got it!

Interviewer: OK-

Respondent: Yeah! You‘ve read a lot. You‘ve read a lot I see that. Yeah. So uh.. Their

office is right across from the Lovefield airport. And uh…So I started there in the

department called ‗diversity and inclusion‘.

Interviewer: Oh. Sounds good yeah.

Respondent: Yeah. So, It‘s a new department because now, the company has been around

for like forty… something years

Interviewer: Yeah-

Respondent: -You know? And, uh, it started just in Texas and then it‘s… like… now it‘s

like all over the United States.

Interviewer: Yeah

Respondent: It is the biggest domestic carrier. But it is funny because … uh, you know

how they are now, they, they bought the AirTran?

Interviewer: Yeah

(Minute 1‟00”)

Respondent: So they are now going international, which is funny because yesterday was

the first time they, they uh did their first flight to Aruba.

73

Interviewer: Oh! I didn‘t know that. That‘s interesting, ya

Respondent: Yeah yeah! And so that‘s why they created this department … the …

‗diversity and inclusion‘ ‗cause they wanted the company to be diverse

Interviewer: Yeah.

Respondent: You know, because of how it is going internationally and all that. So I started

in that pro… uh, that ah, department

Interviewer: Ya

Respondent: And it didn‘t last that long. It probably lasted like three … uh … months.

Interviewer: Ya

Respondent: And then after that, I really wanted a job with Southwest.

Interviewer: Ya..

Respondent: So, then ahm I applied to different ones and I got a job in, uh, in Nashville

Interviewer: Yeah?

Respondent: In Nashville, Tennessee as a, a ticket agent, where they call the customer

service.

Interviewer: Yeah.

Respondent: Which is basically we do the ticketing, we do uh… we do the gate, we do

baggage claim. So it was, it was learning a lot about the industry.

Interviewer: -OK,

Respondent: You know the… whole, the ground operation.

Interviewer: -Mh,

Respondent: So it was very eye opening. I mean it‘s a lot of work. You know…

Interviewer: -Mh

(Minute 2‟00”)

Respondent: … I didn‘t think it was gonna be like that. Because you know how airlines

…like…

Interviewer: Yes

Respondent: … are oversell… uh… overbook

Interviewer: -Mh

Respondent: So you know so it‘s having to… to..uhm, be able to manage that part, you

know of …

Interviewer: -Ya

74

Respondent: … of knowing how to… You know deal with people and all of that. So that

was really interesting. And I always… I mean, coming from headquarters to the

ground,

Interviewer: Yeah

Respondent: it was a big difference.

Interviewer: -Mh

Respondent: Because headquarters is what you read about the company.

Interviewer: -Mh

Respondent: Being so fun and loving, and I‘m not telling you it wasn‘t at the ground. But

at the headquarters it was very much like …

Interviewer: Was it really like that? So fun and loving and…?

Respondent: Fun and loving! Yeah!

Interviewer: Is it? Yes? It‘s like … like that?

Respondent: Yes. It is. Because every Monday, they have a party called ‗the deck party‘.

Interviewer: -OK,

Respondent: In which they would always have alcohol, live music, food, everything free

for employees. And it was right after… after… after… uh… the… this… the business hour

so it would be after work. It was very fun. So you know, they had a lot of activities…

Interviewer: -Mh,

(Minute 3‟00”)

Respondent: a lot of uh, volunteering, and it was really really nice.

Interviewer: Yeah

Respondent: uh… You know why I really wanted a job with Southwest? Because when I

was walking though the headquarters, …

Interviewer: Yeah

Respondent: I would always see that they have an, it‘s like a gallery in the … in the

headquarters

Interviewer: OK

Respondent: Because they have the pictures of the employees. But not only of the

employees, but also of their families.

Interviewer: Oh!?

Respondent: The employees‘ families.

Interviewer: -Nice,

75

Respondent: Like, showing them with their kids and stuff. And I thought like: What

company does that. You know?

Interviewer: Yes

Respondent: I thought it was really neat And I heard really …

Interviewer: -Yes, it‘s true,

Respondent: the things about uh… Herb, you know how and Colleen …

Interviewer: Ya

Respondent: I don‘t know if you‘ve heard… read about them? The families?

Interviewer: Yes, I have. Yeah.

Respondent: Yeah it‘s how they started and how humbled, like, it started very small,

Interviewer: Ya

Respondent: And, because of how they treat their employees … uh

Interviewer: -Mh.

Respondent: I mean, you know how it happened the Wright Amendment, which is going

away? I don‘t know if you read anything?

Interviewer: Yeah I read about that.

Respondent: Ok

Interviewer: They had some obstacles in the beginning, they couldn‘t really operate

because…, there were some … laws and, ya

(Minute 4‟00”)

Respondent: Yes, there was, ya, conflict of interest and all of that. So the employees, what

they did was like, they fought for it in… in… in… I mean, they, they let them fly, but

actually it‘s funny because in October, it‘s going away.

Interviewer: Oh ya

Respondent: So that‘s when Dallas is gonna have a lot of non-stop. So it‘s gonna…

Interviewer: Ya

Respondent: It‘s gonna go grow. But also when the… when the fuel uh… price went up,

Interviewer: Ya

Respondent: I think it‘s somewhere in the 80s or 90s during the uh… war of … you know

the… the uh… uh… the… I think it was in the late 80s

Interviewer: OK

Respondent: That the company was like having problems because of the fuel charges. You

know it was very high.

Interviewer: Ya

76

Respondent: So the employees were like, giving… like, they could buy these tickets that

would be like $1

Interviewer: OK

Respondent: And that was towards the fuel so they would pay towards the fuel. And it was

a nice thing because no one got laid off you know

Interviewer: OK

Respondent: And even the… the Herb, he … he got a pay cut, he didn‘t get a…

Interviewer: -Mh

(Minute 5‟00”)

Respondent: a check for many months. Just to keep the employees and not you know, do

any furloughs or anything like that. So it was really really nice for… for them. And I mean,

now the company is so big, you know, it‘s hard… I mean it‘s hard for the company to

really keep that uh… legacy you know?

Interviewer: Yeah…

Respondent: They continue to do it… they continue. In the ground it‘s another story

because you have… It‘s very micro managed on the ground.

Interviewer: So it‟s not exactly the same atmosphere as in the headquarters on the ground?

Respondent: To be honest with you, no. Really I didn‘t… really…

Interviewer: But did you feel that the employees working there were still kind of happy or

…

Respondent: Oh yeah. I mean they are because it‘s like a family.

Interviewer: OK

Respondent: That is the thing. But because, I think it does have to do a lot with uh, because

we were union.

Interviewer: OK

Respondent: So, so the contract with the union, it was very … uhm, they worked us a lot,

you know. So that‘s why sometimes it was a little bit like, oh my god, like, it was hard to

keep, you know, the good spirit or anything, but I mean you can still see it though

Interviewer: OK,

(Minute 6‟00”)

Respondent: I mean it was very, you work with very uhm, very interesting people, very

dedicated, very, you know the, I mean, it was a family because we would spent more time

in, in work than in the house

Interviewer: Ya,

77

Respondent: Sometimes I would doubles, which is like 16 hours a day. I would start from

four in the morning, leave at nine

Interviewer: It was on the ground, right, when you were still on the ground?

Respondent: On the ground … it was a lot of work

Interviewer: OK

Respondent: So in that sense, I heard a lot of people also like, saying ‗oh, where…? ‘ like

it changed to much, the company has gone so big

Interviewer: Ya

Respondent: And now it‟s not the same, we have, they put a lot of stress to the

employees, you know, to, to get everything on time, uhm, you know, so it‘s just very

stressful

Interviewer: OK

Respondent: So, that‘s why it changes a lot, rather than in the headquarters, where

Interviewer: -Mh,

Respondent: You know, it‘s all happiness,

Interviewer: Ya

Respondent: It‘s different, you know. Once you‘re in the office, I guess it‘s all over, it‘s

everywhere.

Interviewer: -Mh,

Respondent: But, uhm, now I changed, I‘ve been in, I changed to the in-flight department,

I am now a flight attendant

Interviewer: For how long have you been doing that?

(Minute 7‟00”)

Respondent: Uh, I graduated in April 17 so about two months

Interviewer: OK

Respondent: It hasn‘t been a long time, but I noticed a big difference

Interviewer: Ya? OK

Respondent: Oh ya, ya, it‟s great, I love it, there you can experience of the flying,

loving attitude, more like, like, like the headquarters, rather than on the ground,

Interviewer: I see

Respondent: because it‟s also another de-, another union, uh, know, it‘s another contract,

they…

Interviewer: -Ya

Respondent: …work us less hours, you know

78

Interviewer: Ah, OK. I wanted to ask about the, the role of the unions. Do you see any

benefits from that or…?

Respondent: Well… I think I, I do, you know, I do like the union a lot, especially the in-

flight one,

Interviewer: OK

Respondent: because they, uh, we have rest hours, …

Interviewer: OK

Respondent: …like, to have, they cannot work us more than 16, then 16 hours…

Interviewer: -And this is because of the union, or do you think you would have the same if

the union wasn‟t there to support you?

(Minute 8‟00”)

Respondent: Oh ya, no, I think it would be hard, because then the management can always

uhm, you know, can, can work you out to death, you know …

Interviewer: OK, ya

Respondent: …pretty much, without having, and the union really tells you, because, it‘s

funny, because I, I even have like an app in my phone, with the contract

Interviewer: -Mh,

Respondent: …so in case scheduling calls and wants to uhm, say for example calls me on

my day off and I shouldn‘t be called on my day off

Interviewer: -Ah,

Respondent: …you know, uhm, they can compensate me, they give me a day off

because they did that, or pay me double time,

Interviewer: -Ah,

Respondent: …So that‘s why we have the unions, otherwise there will be no control, you

know?

Interviewer: I see, so you do have benefits from that, I guess

Respondent: Oh ya, definitely.

Interviewer: OK-

Respondent: Definitely. And it‟s really nice because, also for the pay, uh, every year we

get paid more, you know,

Interviewer: -Oh ya

Respondent: Until we top out,

Interviewer: I see,

79

Respondent: …so it‘s nice to have that and it‘s just a lot of benefits and also even with

uhm, uh, what they call the OJIs, which is One the Job Injuries…

Interviewer: -Ya

Respondent: …OJIs, uhm OJI, I write it for you here

Interviewer: OJI…

Respondent: uh…OJIs,

Interviewer: -Ah,

(Minute 9‟00”)

Respondent: Which is On the Job

Interviewer: On the Job …

Respondent: …Injuries. I mean with those I mean, also the union, uh, helps a lot also with,

with, you know, representing the, the employee and all of that

Interviewer: OK I see

Respondent: So it does help a lot you know…

Interviewer: Oh that‘s good

Respondent: …with having them there to represent, and it was also on the ground, it was

the same, but in the ground, it, the contract was different, just because, you know it‘s a

different job, but, I don‘t think, you know they still, I feel like they should still, uh,

represent the, the, the employees better in the…

Interviewer: I see

Respondent: cates, you know?

Interviewer: That‘s an interesting aspect, ya

Respondent: obviously more rest, and all of that, you know?

Interviewer: OK. And you said you get a higher salary every year, or…?

Respondent: Every year, it goes up about an hour, I mean an hour, sorry, I mean a dollar,

Interviewer: OK

Respondent: …so and a dollar, and then it starts to increment, so now I‘m getting paid

about 22 dollars an hour

(Minute 10‟00”)

Interviewer: OK

Respondent: …and so, and that‘s in the air…

Interviewer: -Mh

Respondent: …Of course.

80

Interviewer: And you also get paid when you‟re not in the air, when you‟re doing the

preparations and the briefing?

Respondent: Ya, but it‘s less,

Interviewer: OK

Respondent: It‘s like two dollars, but then, those two dollars is from the time the door

closes in the aircraft …

Interviewer: -Mh

Respondent: …to the time we come back to the gate, to the, I mean, sorry to the gate, to

the base

Interviewer: -Mh, OK

Respondent: so if we have a three-day trip, we get paid two hours for every hour, even if

we‘re sleeping in the hotel

Interviewer: -Ah

Respondent: So it‘s nice you know,

Interviewer: Ya that‘s nice,

Respondent: …that you get that per diem, so it‘s not too bad.

Interviewer: –OK,

Respondent: -so I think

Interviewer: –Ya? Sorry, what did you want to say?

Respondent– Oh ya just for topping out for flight attendants, you start at twenty and then

after 13 years you…, the maximum you can get is like 60, an hour

Interviewer:-OK Wow.

Respondent–So, so ya that‘s why almost like more than half of the company is topped out

because the employees just stay, you know,

Interviewer: -Yeah I see

(Minute 11‟00”)

Respondent: -ya, it‘s a good job to be in, you know, but ah, ya I mean some people do it

for so many years, and it‘s interesting because they don‘t get burned out you know,

Interviewer: -Mh,

Respondent-because it‘s very flexible

Interviewer: - I see

Respondent-you can trade your schedule and all of that, so it‘s,it‘s nice.

81

Interviewer:–And what other, aehm, opportunities of personal, of development do you

have, or career developments, can you go to a higher position after a few years, or, be a

purser, or…?

Respondent–Ya no definitely, there is always posting, ahm, they first do it for internals,

Interviewer:-OK,

Respondent-and then they put it externally in case there is no interest, but, I mean, for

example for flight attendants, you can do, you can become a supervisor

Interviewer: –Mh,

Respondent-but the only thing with being a supervisor, a lot of people don‘t like it, because

there‘s nothing like being in the air, you know, it‘s, it‘s another story

Interviewer: - Mh.

Respondent-Once you are a supervisor, I heard you have more responsibilities, it‘s a job

for you, it‘s like a desk job.

Interviewer: –Ya

Respondent– in the air, it‘s more, it‘s not micromanaged, you know

Interviewer: -Ya,

Respondent: it‘s a different atmosphere, you‘re, you have a supervisor there.

Interviewer: –Mh,

Respondent: -You know?

(Minute 12‟00”)

Interviewer: –Ya,

Respondent: -So, you could do that, you could go to head-, headquarters, they have the

marketing department, you know, ahm, customer relations, different departments, but

really ahm, that‘s in the case you are in a position where you wanna change. But there is

definitely opportunity, that‘s why I wanted, I started, ah, customer service, because I

wanted to put my foot in the door in a sense

Interviewer: –I see, ya

Respondent: -Mh, so ya there is opportunity for sure.

Interviewer: – And what you said there is a nice atmosphere in the headquarters, is it the

same type of atmosphere as the flight attendant in the air, or how would you describe the

working atmosphere…in the position?

Respondent: -ah well, ya well, in the headquarters, it was, it was fun where, you know,

they have, you can wear shorts,

Interviewer: -ya

82

Respondent: -it‘s like you, you know, being in your house, you know

Interviewer: - Mh,

Respondent: -ah, it‘s very laid back, and uhm, you know, really you don‘t have any

schedule, set schedule, like, you know, it‘s just nice, it wasn‘t very much micromanaged of

what I experienced you know

Interviewer: –Mh, ya

(Minute 13‟00”)

Respondent - in my department, uhm, in the air, I mean we do have, they‘re very strict

about the uniform and all of that, you know, some people like, you know there‘s always

gonna be people that are not happy with, you know some things

Interviewer: -Mh,

Respondent: -but definitely in the sense of, of the culture you can, you can experience in,

in people that really love their job and make it funny, you know, I‘m sure you‘ve seen the

videos on youtube

Interviewer: – Yes, mh,

Respondent- of flight attendants making the, you know, the funny anouncements

Interviewer: –Ya,

Respondent: - and then you know, it‘s, it‘s great to work with people that are, you know,

that excited about

Interviewer: –I see,

Respondent-helping, you know, giving what they call outrageous customer service, so it‘s

ahm, I really have experienced it more than on the ground

Interviewer: –OK I see, ya.

Respondent– it‘ sort of –interesting, similar to the ah, aem, to the ah, headquarters

Interviewer: –Ya,

(Minute 14‟00”)

Respondent: but ah, I mean, I, what I‘ve heard from a lot flight attendants have been that

it‘s a, it‘s not the same as it was back in like the 90s or the 80s, be-, and that‘s mainly

because

Interviewer: -in a negative sense or in a positive sense, or…neither?

Respondent: -in a negative in a way

Interviewer: -OK,

83

Respondent: -‗cause they‘re more restricted to, you know, doing more, and, and that‘s, it‘s

now because, with the time it‘s changed back in the 80s, you know, before in the 90s, there

wasn‘t that much, ahm the you know like, after 9/11 everything changed you know

Interviewer: –Mh,

Respondent: -that‘s true, that‘s what they mainly say that it changed a lot because of that.

Before they used to be very ahm, they didn‘t use to get in trouble for things, they were

really big partiers, you know

Interviewer: –Mh,

Respondent: -back in the time, because that was the culture you know

Interviewer: -Mh ya, even Herb was like that right?

Respondent: –he was like that and they still say he‘s like that, he‘s like, he‘s always ah

drinking his ah, he likes drinking this whisky, what‘s the name, ah Turkey, Wild Turkey.

Interviewer: –Ah ok,

(Minute 15‟00”)

Respondent: -So he‘s always drinking, he‘s always smoking, you know it‘s just the culture

in the 80s and the 90s, it was good you know. But now, like, I heard before like that even

with the, you know how we have like the kits to drink like with the little alcohol bottles

Interviewer: –Ok,

Respondent: -to sell, they used to take this to their hotel and just, or make that little, ah,

cocktails there, I mean of course you cannot do that now, they‘ve been restricting that

Interviewer: –Ya,

Respondent: -but I guess before that was the culture, you know, it was fine (pause).

Interviewer: –Mh, so it has not much to do with Southwest, but more with the

circumstances I believe?

Respondent: –Well this, right, ya, and I mean that‘s that‘s really common sense that

Interviewer: –Ya,

Respondent: -as the times change,

Interviewer: -Ya of course,

Respondent: -it has to be, ‗cos, ya that‘s what I‘ve heard that people used to…it was

different. You know they used to be very much ah party party party, and now it‘s a little bit

more, you know,

Interviewer: -More restricting,

Respondent: - serious and

Interviewer: –Mh,

84

Respondent: -also with AirTran coming into play,

Interviewer: -Mh,

(Minute 16‟00”)

Respondent: -ah the culture in AirTran, they been saying it was a little bit more, a little bit

more…, I mean Southwest is professional but AirTran was a little bit more uptight, you

know what I mean?

Interviewer: –Mh, I see,

Respondent: -In that case. So also with the merging of that other company coming into

play, just the culture is… has been a mixture you know. So I think that‘s why It‘s been

different also because of, you know, what had happened in the history of aviation

Interviewer: –Ya,

Respondent: -you know, 9/11,

Interviewer: -Mh,

Respondent: -and all of those things that have been a little bit more…

Interviewer: -But overall you would still say that people are satisfied with the working

atmosphere? Although it‟s not as easy going as before.

Respondent: –Ya, you know, definitely

Interviewer: –OK,

Respondent: -if you wanna put it into..

Interviewer: -I can summarize it like that? OK. And generally would you say you feel

appreciated by your employer for your job, for the work you do, or…?

(Minute 17‟00”)

Respondent: –Oh ya definitely, I mean they, they do have a lot of ahm, employee ahm,

how do you say it, like, ahm, recognition programs you know

Interviewer: –Yes,

Respondent: -they have ahm,

Interviewer: - How do they look like?

Respondent: –Well actually they have like, for example in my case ahm, I got a

recognition when I was working on the ground, my supervisor submitted me to

headquarters, and they were like a little, ah, recognition, ahm, ah…, text about me in the

magazine so

Interviewer: –Oh, wow,

Respondent: -it was nice to see, you know. And, and, just to know that you‟re

recognized for your work,

85

Interviewer: -Ya,

Respondent: -and also they, they do have ahm parties of, every year of, they call it ‗spirit

parties‘,

Interviewer: -Mh,

Respondent: -which is like, you know just celebrating, you know,

Interviewer: -Nice,

Respondent: -and it‘s really nice, because last year it was in Sea World

Interviewer: –Mh, oh,

Respondent: -in San Diego, so they paid for everyone, so we had free entrance,

Interviewer: -Everybody, even the ground people?

Respondent: –what is it?

Interviewer: –Even the ground people or just the flight attendants?

Respondent: –Ya, everyone.

Interviewer: –Everyone. Wow,

Respondent: -Everyone. From the ramp people, everyone.

Interviewer: –Mh,

(Minute 18‟00”)

Respondent: -So ahm, you take your family members, they go for free, free food, free

drinks, ah,

Interviewer: -Wow,

Respondent: -so it‘s really nice, and they just had a show with, with the CEO and he would

talk about you know you know the culture and, I mean they still have a lot of activities like

that, and they do have this committee called the „culture committee‟

Interviewer: –Ah ok,

Respondent: -which they, that‘s all they do I mean they‘re in headquarters, that‘s their job

to just ah… come up with these events you know.

Interviewer: –Ok.

Respondent: –It‘s nice that a company actually has that you know?

Interviewer: –That‘s really nice, and that‘s not very common I think,

Respondent: -No, ya definitely. So, what else?

Interviewer: –But is there any way that you notice the effect of the business model that is

kind of focused on these cost savings in any way of your work experience?

Respondent:– Ok, ah,…(pause) well ya actually, let‘s see. Just, coming back to the ground

Interviewer: –Ya,

86

(Minute 19‟00”)

Respondent:- and, and I think I keep thinking about it because I spent there more time than

in this other one

Interviewer: –Mh,

Respondent:-but definitely with the cost of ah, you know ahm, of, of, of just the cost of

having to, ahm, for example turns, we used to have 10 minute turns, which is nonsense

now

Interviewer: -10 Minutes?

Respondent: -it doesn‘t make sense you know, because it takes so much, ah, for everyone

on the ramp, from the ground,

Respondent: –Ya,

Interviewer: -from in flight to put a flight to you know, turnaround a flight in ten minutes,

so it went up to like 30 minutes, but 30 minutes sometimes is just not enough, you know,

Interviewer: -Mh,

Respondent: - and so ah, they cut it something to like 25, which always, if, if they keep

cutting it, cutting it, cutting it,

Interviewer: -Ya,

Respondent: -and then it, it creates a lot of stress.

Interviewer: –I see,

(Minute 20‟00”)

Respondent: - and then, but at the same time the flights, ah, because it‘s not realistic for

flights to come, like become like a 40 minute turner you know

Interviewer: –Ok,

Respondent: - so then, like, it‘s like a snowball effect, because as the day goes by, in the

morning, if there‘s a delay, that delay may cause, ahm, you know like people to

disconnect,

Interviewer: -Mh,

Respondent: - so in a sense because of them trying to like

Interviewer: –I see,

Respondent: - put more

Interviewer: –Ya,

Respondent: -flights into the system

Interviewer: –Mh,

Respondent: -and making the turn smaller, it‘s really affecting the

87

Interviewer: –Mh,

Respondent: -overall you know, on time performance

Interviewer: –Mh, I see,

Respondent: -you know, that‘s what I‘ve noticed, you know of how they‘ve been cutting

that. I mean there‘s other examples I‘m sure, but ahm, basically that‘s something that

Southwest has been, you know, in the media for, really cutting on that turnaround time

Interviewer: –Mh,

Respondent: -you know,

Interviewer: -But other than that, there‟s other thing noticeable that you as an employee

feel that you‟re affected by this focus on costs?

Respondent: –To be honest with you, I have to really think about it, but noticeable, not

really.

Interviewer: –But that‘s a good sign that nothing is on your mind, that would mean that

there‘s not so much that would affect you I believe

(Minute 21‟00”)

Respondent:– No, no, to be honest with you no, and not that I can think of,

Interviewer: –OK. And concerning the training, did you have to pay for your own training

to become a flight attendant and to pay for the uniform, because that is sometimes the

norm?

Respondent: –aha, well you know what it‘s funny because with Southwest, they… they say

they don‘t pay you for the training, but the thing is that ah, they, you do get a…a start of

twelve hundred dollars

Interviewer: –Mh,

Respondent: -when when you finish, if you don‘t finish, you don‘t get anything.

Interviewer: –OK,

Respondent: -But if you finish, you get twelve hundred dollars

Interviewer: –Mh,

Respondent: - and that‘s of course before…after…before taxes so and that‘s being less, but

ahm, they do give you ah, ah like money to eat, so it‘s like 500 dollars more to eat

Interviewer: –Mh,

Respondent: -which is nice, you know I mean, who eats for 500 dollars you know?

Interviewer: –Ya, that‘s really nice,

Respondent: -but ahm they, they wanna make sure that you‘re able to, you don‘t worry

about where is your money gonna come to eat

88

Interviewer: –Ya,

(Minute 22‟00”)

Respondent: -or anything like that or, they know a lot of people have families you know,

so that‘s nice of them to do that.

Interviewer: –Mh,

Respondent: -with the uniform, it‘s payroll-deducted. So it‘s like that. You know, so once

you start working, they take out like 20 dollars a month

Interviewer: –Ah,

Respondent: -so you eventually pay it off, but other than that

Interviewer: –I see,

Respondent: -Ya,

Interviewer: -OK, and how do you perceive your overall job security? Do you think your

job is just very secure or?

Respondent– I do think so, and just because of how it‘s been in the previous years you

know with Southwest always having a profit, you know, continuously throughout the

years, and they do not furlough, they do not layoff people with the merging of ah

AirTran and Southwest, they took those people form AirTran and gave them a job,

you know, it‘s not like they didn‘t give them an option

Interviewer: –Ya,

(Minute 23‟00”)

Respondent: -so I do believe its, its I have a job security with Southwest, but then you

never know, the industry is very, you know.

Interviewer: –But I did hear that they have a no-layoff policy so could indicate that your

job is quite secure, I don‘t know if it‘s still the case or if it‘s in the past

Respondent: –You know what it‘s really, I mean a policy not really, I don‘t really think

they have it on paper

Interviewer: –Ya,

Respondent: -but it‘s just of the history you know, of how it‘s been

Interviewer: –Ya,

Respondent: -I would be worried if I, to be honest with you, even though like for example

JetBlue

Interviewer: –Ya,

Respondent: -it‘s a good company

Interviewer: –Ya,

89

Respondent: -but I would be worried, just because JetBlue has been in the business less

years than Southwest you know,

Interviewer: -Mh,

Respondent: -and also because of Southwest ahm, ah …being expending, you know

Interviewer: –Mh,

Respondent: - so if the company was shrinking then I would be worried,

Interviewer: –Ya I see,

Respondent: -you know what I mean

Interviewer: –Ok, I see, and

Respondent: –Ya,

Interviewer: -If you could rate it on a scale from one to eight and eight being the best, how

satisfied are you with your job?

(Minute 24‟00”)

Respondent: –(small pause) I would say eight ‗cause

Interviewer: –Oh wow,

Respondent: - I like it a lot, I like it a lot, and since the beginning, even though I

experienced times on the ground where it was tough you know,

Interviewer: -Mh,

Respondent: - ahm but overall looking at how the company, the legacy, what it stands for,

Interviewer: -Yes,

Respondent: - how much they look after us, you know, having a good union to represent

us, I am very satisfied with the company, you know

Interviewer: –Mh,

Respondent: - and I love what I do. And it‘s it‘s just nice when people ask you ‗oh, what

are you doing?‘ you tell them you‘re with Southwest Airways, they‘re always like ‗oh, it‘s

such a great company‘

Interviewer: –Ya,

Respondent: -so it‘s nice to, to know that you‘re secure with us, like we‘re talking right

now, that I do feel it‘s pretty secure

Interviewer: –Mh.

Respondent: -Job

Interviewer: –Ya, nice. My last question would just be if you would recommend

working for Southwest, but I believe you just answered that

Respondent: –Oh definitely

90

Interviewer: –Great,

(Minute 25‟00”)

Respondent: - ya I‘m always trying to ah, get people to, you know, if I know people

they‘re like ‗oh yeah sure‘, ah, at least ah, you know apply for Southwest, any position,

Interviewer: -Ya,

Respondent: -just put your, your feed on the ground and just, I always recommend people

to apply for Southwest. Ya, so.

Interviewer: Thank‘s so much for answering all those questions

(Closing talk)

91

Interview 2:

Transcription of the second interview with two flight attendants from Ryanair, held on 9th

July 2014 on Skype

Interviewee 1: Hungarian, female, 26 years of age, based in Belgium, flight attendant for

Ryanair for two years

Interviewee 2 (additional): Polish, female, 25 years of age, based in Belgium, flight

attendant for Ryanair for two years

Note: due to problems with the sound, certain parts could not be transcribed, denoted as

―…‖

(Warming up)

Interviewer: Just in the beginning, how long have you been working for Ryanair?

Respondent 1: It‘s actually two years, for me this summer was two years

Interviewer: Two years? Ok, and ahm, how do you perceive the working atmosphere?

Respondent 1: I like it…

Interviewer: Yeah?

Respondent 1: -For me it‘s fine (laughs) Ok now you see Valerie is like that (doing a

gesture)

Interviewer: OK

Respondent 1: No but I like it. I mean Ryanair, that‘s the thing, at Ryanair we can basically

do whatever we want. Like, you know, like, if there is some fun guys on board, or, or some

people that you like, or, just you know they‘re like sympathique or something, you know

like, you can go there, you can talk, ok we have to do our … shifts,

Interviewer: -Mh,

Respondent 1: -We have to do this studying and, it‘s fine ya, you have to do it, I mean, but

in the meantime we can have fun, it‘s not that.

Interviewer: OK-

(Minute: 1‟00”)

Respondent 1: But it depends on the bases, like now Ryanair has like, I don‘t know, 60, 60

…how many bases do we have? 60 something bases, like 62, all over Europe, so it

depends, who is the boss there, who is the, like, the manager of the base,

92

‗cause some bases are more strict-

Interviewer: Mh, I see.

Respondent 1: …or, depends on the people that are flying, you know like, Belgian are

different, or Hungarians, or British or something

Interviewer: -Mh,

Respondent 1: …

Interviewer: Have you changed bases already or do you have to stay in one base, or?

Respondent 1: I changed, first I started in Charleroi18

, then I went to Tenerife

Interviewer: Oh, nice-

Respondent 1: it was only for like two and a half months, because we

operated like, kind of long cost flights from the Canaries,

Interviewer: -Mh,

Respondent 1: -From Tenerife to Sweden or Norway or to Germany, Memmingen, … it

was good and now we …

Interviewer: Ok, so the working atmosphere kind of depends on the base and the

managers, do you think, or?

Respondent 1: Depends on the base, I mean ya,

Respondent 2: Of the people,

(Minute: 2‟00”)

Respondent 1: -And the people, ya, exactly, exactly, the people, like, our colleagues, like

what, what people we have. Charleroi, the city sucks. The flights, some are bad, some are

ok, and there, they have like, … 16 aircraft for the Charleroi or 18, over the last summer,

so like that it was 300 cabin crews.

Interviewer: Wow, OK-

Respondent 1: With like… after a while we know each other, we were flying, you know,

with some people, you know you have to, so it depends on the people actually

Interviewer: Mh, OK, and, do you feel appreciated by the employer for the work that you

do?

Respondent 1: Ahhh (laughs)

Respondent 2: Yes, definitely (laughs)

Respondent 1: No.

Interviewer: No?

18 Ryanair base in Belgium

93

Respondent 1: No, not that much, no

Interviewer: OK, that‘s interesting

Respondent 1: No, like for example we don‘t have anything, like ah, we cannot have

anything from the bar, like, if you want to eat or drink something we have to pay for it,

exact same amount as a normal passenger

Interviewer: OK-

(Minute: 3‟00”)

Respondent 1: -…Even if, like, imaging we are delayed or something or you get on an

extra flight,

Interviewer: Ya-

Respondent 1: You cannot take anything, not even, in case you know like I prepare myself

for two flights for example, and I have fly, I have to do four, because of something, and

then I don‘t have enough food, I don‘t have enough … or whatever, even in this case we

cannot, or if you want, or you steal or you buy.

Interviewer: OK-

Respondent 1: Or, or the tickets, like, we cannot fly for free, we have like staff travel, …

like one ticket for us costs 7 Euros,

Interviewer: OK-

Respondent 1:- Plus the airport fees

Interviewer: OK-

Respondent 1: For like, ah, depends, here in Brussels it‘s expensive,

Interviewer: Ya,

Respondent 1: Like the airport taxes are 30,40 Euros, so basically sometimes it‟s cheaper

if you take the normal passenger ticket.

Interviewer: Is that Brussels airport or Charleroi?

Respondent 1: It is Brussels, Charleroi was OK, Charleroi is quite cheap.

Interviewer: Ah OK, ahm, and is it all the same for the pilots as well or, that they also have

to pay for the food and?

(Minute: 4‟00”)

Respondent 1: Ah, the pilots can ‗jump seat‘,

Interviewer: OK-

Respondent 1: -Like if they are in their uniform,

Interviewer: -Mh,

Respondent 1: -They can always fly for free.

94

Interviewer: But do they also have to pay for the food and the drinks like you have, or?

Respondent 1: Ya

Interviewer: The same?

Respondent 1: Yes. They want something, they also have to pay.

Interviewer: OK. And what you said with the 7 Euros, is this considered the discount that

you get or, on the flight tickets?

R1…. Sometimes you know, OK, it can be cheaper, the only good thing that we can take

those tickets

Interviewer: -Mh,

Respondent 1: -Before hours, before the departure. So like if I decide today that I want to

go somewhere tomorrow, I can still get the ticket.

Interviewer: OK, but, you do get the discount right?

Respondent 1: Ya, this is a discount actually, 7 Euro, it‘s not that bad

Interviewer: But in the end it‘s not so cheap because you have to pay the airport taxes?

Respondent 1: Ya 60, 70 Euros …

Respondent 2: It depends on the airport, …

(Minute: 5‟00”)

Interviewer: -Sorry I don‘t understand so well,

Respondent 1: …

Respondent 2: I said that now, on those big airports, for example from Brussels to Spain, I

don‘t know, Barcelona, or Alicante

Interviewer: -Mh,

Respondent 2: A roundtrip ticket costs like 80 Euro.

Interviewer: Wow.

Respondent 2: It‘s a lot, you know, … if you wanna go on vacation, it‘ very…

Interviewer: OK-

Respondent 1: …Actually like Portugal, like Lisbon or Porto, whatever, those, those

airports are expensive, like 40 Euros, …

Interviewer: I see.

Respondent 1: Or, let‘s talk about the airplanes more, or for example imagine; our uniform,

we have to pay for our uniform.

(Minute: 6‟00”)

Interviewer: You have to pay for your uniform?

Respondent 1: Yeah. It‘s always deducted from the salary for one year-

95

Interviewer: OK-

Respondent 2: Ya, and then they‘re giving us like back, you know, some money, and…

Respondent 1: Yeah, they give us back

Respondent 2: - And mostly for keeping it, you know like, nice and tidy. So what they are

giving us is actually-

Respondent 1: Covering-

Respondent 2: -Yeah, but not paid back.

Respondent 1: So basically Ryanair, we have to pay for everything,

Interviewer: Mh,

Respondent 1: And then, ah, the salaries (makes a head movement)

Respondent 2: -Do everything, and …

Interviewer: Ya, how about the salary, do you feel that this is on average, industry

average, or below or above or, anything?

Respondent 1: I would say average.

Respondent 2: Yeah, that‘s what I‘d say.

Respondent 1: Ya exactly, but I mean it‘s different, ya like, from Hungary, this salary,

… Euro, into Hungarian currency

Interviewer: Yes-

Respondent 1: Is like amazing, ya, I‟m earning like a queen. But here in Belgium, it‘s

like eh, eh, eh, you know, like

Interviewer: I see

Respondent 1: Here, we are not so good, I mean we can, we can live, ok, and we can spare

money if we are not going out every night or something, but (pause). But (laughs). I should

know.

(Minute: 7‟00”)

Interviewer: Are the salaries the same for everyone based in Europe or are there

differences if you‟re in Belgium or in Ireland or?

Respondent 1: Oh (laughs)

Respondent 2: Well-

Interviewer: Do you know that by chance?

Respondent 2: For example, if you live in Poland, you‘re based in Poland, or in Hungary,

uh, another different currency.

Interviewer: Ya

Respondent 2: So then there

96

Respondent 1: Exchange rate

Respondent 2: Ya, because of the exchange rate, the money per hour (pause) ya like, I

don‘t know, for one hour, you‘re getting like five six Euro less

Interviewer: OK, because of the currency change?

Respondent 2: Ya

Respondent 1: And actually they even say, you know, like, like countries, like for example

Poland, Hungary, they are cheaper countries, so if you get less, because you‘re, you‘re OK

Interviewer: OK

(Minute: 8‟00”)

Respondent 1: Like, kind of, I don‘t know, they‘re not, it‘s not, not, not a nice thing, you

know like. For example tomorrow is a Hungarian course and I‘m going home… and

they‘re earning like 500 Euros less than me, and they, we have the same flight hours.

Interviewer: Did you say less than you, 500 Euros less than you?

Respondent 1: (nodds) And we have the same flight hours, yeah. And, and then of course

we have another issue, if you pay taxes in Dublin or if you pay taxes in the country where

you are, because before 2012, June, or, or, July, because it started then… we had the

old contract, so it means that you only pay the taxes in Dublin.

Interviewer: -OK

Respondent 1: So like, it‘s OK, ya, it can be also, but like it‘s cheaper.

Interviewer: -Mh,

Respondent 1: After 2012, June

Interviewer: Ya-

Respondent 1: June, July something that area, always the European Union made this kind

of illegal, it said that everyone has to have a contract from that country for like now, if I

live in Belgium, I have to have the Belgium like taxes or social securities

Interviewer: I see, OK-

(Minute: 9‟00”)

Respondent 1: And like here, it‘s very expensive, and if you are in Germany, it‘s also very

expensive

Interviewer: Ya I heard that-

Respondent 1: (laughs) Ya, some people coming from Germany, they‘re like ‗Oh my god

it‘s even more expensive than here‘.

Interviewer: So, does it mean you have to pay higher taxes, or does it mean Ryanair has

higher social charges for you, but nothing changes for you?

97

Respondent 1: Oh, we have to pay, we have to pay.

Interviewer: You have to pay.

Respondent 1: … the difference between the old contract styles…. and the new contract

styles can be 300 Euros.

Interviewer: OK

Respondent 1: And, like, also, fly the same, and ah, kind of the same salary, but because I

pay 150, and they pay like 400 on the taxes, and actually like if you pay taxes as a Polish

girl in Belgium you will never get it back.

Interviewer: OK-

Respondent 1: But, I mean, like, you know, we‘re not going to die here or we‘re not going

to die, I don‘t know

Interviewer: Ya-

Respondent 1: You have to see the country where you are from, it‘s actually, it‘s not that

bad.

Interviewer: I see. Ahm, did you also have to pay for the whole training part, or just for

your uniform?

(Minute: 10‟00”)

Respondent 1: Of course (laughs), yeah. Of course. We have to pay for the training course,

we have to pay for the accommodation, in the training course (pause). Me, I had a training

in Frankfurt Hahn, if you know it

Interviewer: Oh ya, I know it, ya

Respondent 1: This awesome place

Interviewer: Ya-

Respondent 1: There is nothing but forests (laughs), but it‘s fine.

Interviewer: OK- uhm, is it true that you get a sales commission, for everything that you

say, sale?

Respondent 1: Yes, sure

Interviewer: Is that about 20 percent of your salary, is that information correct?

(Respondent 1 & Respondent 2 laugh)

Respondent 2: sorry, now I can talk

Respondent 1: …

Respondent 2; So it‘s ah, whatever we earn on board,

Interviewer: Mh,

Respondent 1: Ten percent from that whole ahm money

98

(Minute: 11‟00”)

Respondent 2: -it‘s for us and is divided by whole crew.

Interviewer: Ah,

Respondent 2: So, one for each …, if we made the bar for 1000 Euro, 10 percent is gonna

be 100, so divided 100 for four is 25 per head.

Interviewer: OK

Respondent 2: But, then, you know, where‟s getting this commission, like, after 2

months, because they have to calculate.

Interviewer: OK, and this is additionally to your basic salary, right?

Respondent 1 & Respondent 2: Yeah

Interviewer: Ah, OK:

Respondent 1: It‘s actually not bad

Interviewer: Ya-

Respondent 1: It‘s not bad, it‘s not bad

Respondent 2: Normally, it‘s not bad, but sometimes they‘re just screwing us up, and, and

it‘s really bad, because, you know, if you don‟t get the sales bonus, you don‟t, you don‟t

feel motivated to work for this sales bonus, you know,

Interviewer: Ya-

Respondent 2: It‘s like this, if you get the money, you feel like, yeah yeah I earned it, so I

wanna do it more.

Interviewer: -Mh-

Respondent 2: If you don‘t earn it, you can like, I don‘t care.

Interviewer: -Mh,

(Minute: 12‟00”)

Respondent 1: And sometimes …for example our catering company, they‟re on strike

or something,

Respondent 2: yeah-

Respondent 1: they‘re always on strike and then, you know, lots of things are missing, or

they‘re not putting, ah, you know, the bar is not as it should be in the papers, so basically

it‘s missing, at the end it‟s deducted from us.

Interviewer: Oh,

Respondent 1: OK like, but it‘s not our, so we have to actually go after it, like there were

periods where we had to always plan ‗this is what was missing, this is from us, this is from

99

the other crew‘, and than it was OK, but it is like, you know, it shouldn‘t be us, you know,

it‘s just, uh

Interviewer: No. Do you know why they are on strike by chance?

Respondent 1: Oh, that was a whole catering, I don‘t know, I think the whole catering, I

don‘t know what, the company was on strike. It wasn‘t just for Ryanair-

Interviewer: But it had nothing to do with Ryanair or?

Respondent 1: No, no, no, no, no

Interviewer: OK, it‘s a different story, OK.

Respondent 1: Like, for all of the other companies, it‘s just, it‘s just, you know, bad luck

Respondent 2: … the same as French ATC controllers (laughs)

Interviewer: OK

Respondent 1: Ya. They go on strike, like every two months.

(Minute: 13‟00”)

Interviewer: Yeah true. Uh, another question would be: if you feel any effect of that

business model that is focused on cost savings in your work experience. But I believe you

already said things like paying for the training yourself and

Respondent 1: Uh… yeah

Interviewer: Is there anything else you can think of or does it not effect you?

Respondent 1: I can just think of the people‟s attitude you know, because everyone is like

Ryanair is a cheap airline, like lots of times, like you know some people just come onboard

and they are like ”oh my god, you are Ryanair”

Interviewer: Really?

Respondent 1: And it‘s like …

Interviewer: They say that?

Respondent 1: Yeah yeah they say that quite often, yeah. And it‘s like ―Oh! Oh not with

Lufthansa‖. OK next time you can go with Lufthansa

(Respondent 2: laughs)

Respondent 1: I don‘t miss you, I don‘t want you to be here.

Interviewer: Mh

Respondent 1: They are really like, uh, sometimes you know like

Interviewer: A bit rude?

Respondent 1: Yeah. The things that we say is a thing for your security… we are not

saying those things because we want we want to say that you know like: Don‘t put your

bag here or there or whatever.

100

Interviewer: Mh-

(Minute: 14‟00”)

Respondent 1: People are arguing or they are like, they have this, they have this attitude

towards us, OK, like

Interviewer: OK-

Respondent 1: And actually it‟s because of this you know, like, reputation that we have

and, uh, yeah “this cheap airline you know they are cheating on us” you know

Interviewer: Mh-

Respondent 1: with the boarding card, if you don‘t print it, the whatever, the bag, if it‘s too

big, or whatever. So actually, we have some issues with that.

Interviewer: Ok so you noticed that on the customers then. But other than the passengers

do you also notice it from the working, I don‟t know, the working conditions if it‟s-?

Respondent 1: I mean, for example, like, I don‘t know but we are like you know this

employee treatment or something we are not like, like, we are just some number

basically, you know like, like we are not, we don‟t have the Ryanair contract. We are

like subcontracted by some agency.

Interviewer: Ah OK-

(Minute: 15‟00”)

Respondent 1: There are three agencies. No, only two agencies are. And then every

contract is for three years. And after three years or you get another one for three years

or you can get promoted and then you get a Ryanair contract.

Interviewer: Mh-

Respondent 1: And if you get a Ryanair contract, then you‟re already getting better

because then you have a basic salary.

Interviewer: Oh-

Respondent 1: That you get every time. Because now we don‟t have, like now if I don‟t

fly, I don‟t have money.

Interviewer: Ah. You only get paid when you are in the air, no?

Respondent 1: Yeah-

Interviewer: But not on the ground, right?

Respondent 1: We close the door. Like when we close the door and then it starts already

and it‘s fine, but like for the boarding and for the disembarking, we don‘t get any money.

Interviewer: And once you are on the Ryanair contract you get paid for that as well or?

101

Respondent 1: No. No but if you are on Ryanair contract you get basics like; if I break my

leg tomorrow,

Interviewer: Ah OK-

Respondent 1: I cannot go to fly for like 2 or 3 months

Interviewer: Mh yes

Respondent 1: I, I‘m not going to get any money.

Interviewer: Yes

Respondent 1: Because I‘m not flying.

Interviewer: Mh-

Respondent 1: And if you are on Ryanair contract, you get the basic

Interviewer: So you have more security then?

Respondent 1: Yes exactly, exactly. It would be, it would be already good.

Interviewer: Yeah

Respondent 1: Yeah. You never know but…

(Minute: 16‟00”)

Interviewer: And do you know more or less how many, how much percent is paid on the

contracts or, outsource; or how many are, I mean that‟s a standard? When you start in

Ryanair you‟re always subcontracted by other companies?

Respondent 1 & 2: Yeah.

Interviewer: And only after a few years, when you get promoted, you are-?

Respondent 1 & 2: Yeah.

Interviewer: OK, I see.

Respondent 2: Well, it was a few years ago, it was very easy to get a contract, because,

you know, I don‘t know, it was just very easy to get, ahm, the Ryanair contract, they were

after one year, sometimes, they were already becoming the ‗CSS‘, and now, you have to

wait at least three years.

Interviewer: OK, I see.

Respondent 2: And after you can apply, you know, and they‘re considering if they need

you to be as CSS, or if they don‘t.

Interviewer: OK, and what type of job promotion opportunities do you have, of

development?

Respondent1 & Respondent 2: Ah-

Respondent 1: Hm, so we can be-

Interviewer: Ya-

102

Respondent 2: You can be, ah, supervisor of the cabin,

Interviewer: Mh-

(Minute: 17‟00”)

Respondent 2: Junior supervisor of the cabin. Then you can be supervisor of the cabin,

then-

Respondent 1: So basically, it‘s the same job

Interviewer: Ya-

Respondent 1: Just, you have the more, ah, more responsibilities and the paperwork

Interviewer: I see. And you get a higher salary then I believe, no?

Respondent 1: Not a lot

(Respondent1 & Respondent2 laugh)

Respondent 1: It used to be, it used to be, but thanks to these taxes, here or there, not

anymore. For example us from the same contract, from Charleroi, we have almost the

same, or like 100, 200 Euros less than a, than a supervisor.

Interviewer: Oh, interesting

Respondent 1: Because now they have to pay so much on taxes here, that they just lose it.

Interviewer: OK-

Respondent 1: So actually they are complaining because I mean it‘s

Interviewer: Ya,

Respondent 1: they have the responsibility, you know, whatever they are the once that like

Interviewer: Ya, so you do have development opportunities, or?

Respondent 1: Ya, this one, and then-

Interviewer: But then you still don‟t get a lot of more, a lot more compensation for that?

(Minute: 18‟00”)

Respondent 1: Ya, but at least it‘s you who is the boss, you know. Like it would be already

good, at least there are no people, you know, telling you-

Respondent 2: And then from the supervisor, you can become a base manager,

Respondent 1: Base supervisor-

Respondent 2: True, ya, base supervisor-

Respondent 1: You can go in the office, so then you are not flying, ya, not flying that much

anymore, but you‘re …

Respondent 2: And then you can go for training, you know, you can be an instructor,

examinator, so, you know, I feel like you can-

Respondent 1: Oh yeah, you can-

103

Respondent 2: Yes, you can, for sure

Interviewer: But in that case, would you have an increase in salary or does it only-?

Respondent 1: Yes I think you will

Respondent 2: In this case yes

Interviewer: OK, it just depends if you‟re, just a crew supervisor, then you don‟t get a

much higher salary, but if-

Respondent 1: …

Interviewer: OK

Respondent 1: …

(Minute: 19‟00”)

Interviewer: Sorry, the sound is really bad at the moment,

Respondent 1: Oh well,

Interviewer: Can you repeat that?

(Respondents 1 & 2 laugh)

Respondent 1: Ah-

Interviewer: Ah ya, now it‘s good

Respondent 1: Like…. taxes, you know, that you have to pay, like, in the country like us in

Belgium,

Interviewer: Mh,

Respondent 1: …like other people, it‘s not, it‘s not Ryanair idea, so Ryanair wouldn‘t

mind to give more money, basically,

Respondent 2: Yeah-

Respondent 1: -For the supervisors, it‘s just the European Union made this

Interviewer: OK, I see

Respondent 1: -Legislation, but you have to have the taxes where you are based, because

actually the-

Respondent 2: Yeah, but on the other hand, if they‘re taking more taxes, they don‘t wanna

give you more money-

Respondent 1: Ya OK-

Respondent 2: At the same time, ya

Respondent 1: Ya, OK, they don‘t wanna give…

Respondent 2: You know what I‘m saying, like, if they would increase salary-

Respondent 1: Yeah-

Respondent 2: Then deduct the taxes, ah, deduct the taxes from this country,

104

Interviewer: Ya,

Respondent 2: Then it would be the same as an old contract.

Interviewer: Mh-

Respondent 2: But basically no, ya, …

Interviewer: I see. How would you perceive the level of job security that you have?

(Minute: 20‟00”)

Respondent 1: That‘s not bad actually. I mean to get out from Ryanair you really have

to be bad like (laughs). Like, very bad, like.

Interviewer: OK-

(pause)

Respondent 2: Even if you make a big mistake, first, they gonna invite you for an

interview, you know, they will ask you what happened …, but then you explain what

happened exactly, you know, ….

Respondent 1: And I mean it‘s just a contract for three years, and generally for the airlines,

they have like half a year or the seasoned contracts or the JetAir, or even, no? JetAir, have,

like, you know, some periods contracts

Interviewer: OK-

(Minute: 21‟00”)

Respondent 1: Basically, Ryanair is the only one who gives you like three years contracts,

you know? Maybe this, you know, with this, ahm, situation it‘s not that bad actually. At

least I have a three years contract, so. Here are people that shouldn‘t be here already, but

they are here, so.

Interviewer: And you don‟t have that principle of seniority, right, that the older you get or

the more time you spend with Ryanair, your salary increases, it‟s not like that, is it?

(Respondents 1 & 2 shake their heads)

Interviewer: I mean it has nothing to do with the time that you spent in the company

(Respondent 1 shakes her head)

Interviewer: OK, just to confirm that what I read is true. OK and another thing, there is no

cooperation with unions, right? You have no trade unions that-?

Respondent 1: We don‘t, we don‘t, the pilots, they have, I think,

Interviewer: Ah, OK

Respondent 1: But they have, the pilots have trade unions, but, like, but they are different,

yeah

105

Respondent 2: Yeah, but I think, you know, why they are striking is like they would like

to take opportunity as well, but I‘m not even sure if they want to.

(Minute: 22‟00”)

Respondent 1: Yeah because for us, more like, there are so many people that they spend

here, working for Ryanair for five, six years,

Interviewer: -Mh,

Respondent 1: -They are totally burned out, they are fed up, but because it‘s actually a

good job, like, when you … it‘s a very good job. And if there are nice people, you can

really have fun, so they are not leaving, and they are just complaining all the time. If they

would go for the trade union, my God (laughs). … would be like forever, you know, just

complaining and. I mean we would need, we would need to have, because sometimes, we

are not protected, like, you know like, for different things, for example if we get sick, we

cannot get, we don‟t get any money, or, ah, same as …

Interviewer: Ya-

Respondent 1: On the other hand, you know, when we get, when we go for a training

course, you know, it‘s, like, they actually telling us like no one is going for, you know, for

a training course, and you go ‗Oh, my God, I have to pay for this, for everything‘, it‘s ah-

Respondent 2: Yeah, I think, this is the worst part, you know, they are not really

helping you with anything, and then if something happens,

Interviewer: Mh-

(Minute: 23‟00”)

Respondent 2: It‘s really, really hard because … to get any support, you know, from

Ryanair, if you are on an Irish contract, if we are sick because we have something,

Respondent 1: Ya-

Respondent 2: -We don‟t have insurance in Belgium, to get anything from Ireland it‟s

almost not possible, you know

Interviewer: Mh, I see

Respondent 2: Basically everything goes from our pockets. If there was …. with me, or

you don‟t feel very secured, you know.

Interviewer: Mh

Respondent One: Or even, like, in the beginning, like, when I started I went to Charleroi,

you know, with my bags from Haan,

Interviewer: Ya-

106

Respondent One: And then tried to find an accommodation. And you get to a country, or

to a part of the country, where they don‟t speak any English, everybody speaks

Respondent 2: -Yeah

Respondent One: -Just French, you can‘t, really like, it‘s kind of impossible, then they‘re

asking for the contract of the, of the job, but then, for this you have to get registered, and,

like, it‘s like a whole mess.

Respondent 2: And you see this is the difference between easyJet and Ryanair,

Interviewer: Ya?

(Minute: 24‟00”)

Respondent Two: EasyJet puts only people in the particular bases if you speak

language over there, plus English. Ryanair just throws you wherever they need you,

you know?

Interviewer: I see-

Respondent Two: They don‘t look on your application and-

Respondent One: Ya-

Respondent Two: For example, I was, learned German for very long time and I applied for

Germany, you know, I wanted to improve, I wanted to …, and they sent me to Belgium,

which, I never, ever learned French, you know, and they put me Charleroi, where nobody

speaks English. Can you imagine?

Interviewer: Oh, ya, that‘s difficult.

Respondent One: Ya-

Respondent Two: Because I‘m not gonna learn French, you know, in two years …

Interviewer: No

Respondent One: And then, people, you know, actually on board, they are right, because

sometimes, you know, I mean by now we can, we can understand every language, like, by

now, which is European language, we can understand but-

Respondent Two: Yeah

Interviewer: OK

Respondent One: In the beginning (laughs), yeah the basics, of course, I mean, you know,

this cabin language, like what we order, …,

Interviewer: Ya

(Minute: 25‟00”)

Respondent One: I know, I know ‗maleta‘, …, like, always the same, but, but then, you

know, like, they are right actually, like, if you‟re flying from Charleroi, and we are the

107

Charleroi base crew, or, like, you know, we should speak French, I‘m not, I‘m not

saying no, like, yes, we should, but-

Respondent Two: It‘s, it‘s, it can become a problem, you know, if you have an

emergency,

R1- Ya, exactly-

Respondent Two: -You know, someone is sick, and you cannot communicate, because if

you don‘t speak Portuguese, if you don‘t speak Spanish,

Interviewer: Ya, I see

Respondent Two: Because you don‘t have time to find a person who speaks English, you

know? So, it‘s really bad

Interviewer: And you said it‟s different at easyJet because they only send them to countries

where they speak the language-

Respondent One: Yeah

Interviewer: -Or just the English-speaking countries?

Respondent Two: No, it‘s uh, I said that, what I mean is uh, what I meant is, uhm, if, for

example, easyJet is opening the base in Lisbon

Interviewer: Mh,

Respondent Two: If you wanna apply, you have to speak fluent Portuguese-

Interviewer: Ah-

Respondent Two: -Or you have to be Portuguese

Interviewer: OK, I see

Respondent Two: This is the difference

Interviewer: Mh. OK, and one last question, uh, overall, how satisfied are you with your

job? Maybe on a scale from one to eight, if eight is the best, what would you say?

Respondents 1 & 2: Aaw-

Respondent Two: I would say seven, you know-

Respondent One: I would say seven as well, ya

(Minute: 26‟00”)

Respondent Two: Are you satisfied with the job, I really like my job, it‟s just the

employer I don‟t like (laughs)

Respondent One: No most of us we are like that, you know, because our job, like, I‘m

going to fly tomorrow, you know, and actually I‘m like, I don‘t have this feeling ‗Oh my

God, I have to go to work‘,

108

Interviewer: Ya-

Respondent One: It‘s the opposite, I‘m like OK, OK, it‘s gonna be good, I‘m going to

Lisbon-

Interviewer: Ya,

Respondent One: -Probably gonna be fun guys on board, I can have fun, you know,

Interviewer: Ya

Respondent One: -Kind of that. People I‘m gonna fly with. But, like, it‘s not, not like ‗Oh,

again, again‘, you know. We are still OK, but it‟s actually because, because of us,

because of the people as we fly, the atmosphere, you know

Respondent Two: Yeah

Interviewer: Ya

Respondent One: And actually really, the job itself is not, not hard, you know, selling

coffees, and then talking with people,

Respondent Two: -It‘s actually the same that you‘d be doing on the ground, it‘s just 40

000 feed above the ground

Interviewer: Ya. But you said you like your job, but-

Respondents 1 & 2: -Yeah

Interviewer: -Just not so much your employer?

Respondent One: It‘s just, that‘s just Ryanair, you know, these things that you said before,

you know, we have to always pay for everything,

Interviewer: Mh

(Minute: 27‟00”)

Respondent One: Ya basically, ah, the, the last one, like, us cabin crew, you know, like.

Because if we are out, there‘s another ten people coming, you know,

Interviewer: Mh, ya, I know

Respondent One: -All the time, all the time. So, it‘s like, and expanding, and people-

Interviewer: I see.

Respondent One: So basically, you know, like that‘s the thing. And we actually, sometimes

we can feel it.

Interviewer: Mh, OK

Respondent One: And then they, they always come up with new ideas, what we should

do or how we should do and this is like, even with the selling or uh, you know, like, some

things, some aren‘t so, we are not saying no, but there are some ideas, which are like ‗man,

109

you don‘t work on the aircraft anymore, you don‘t know that it‘s not possible to do it, or

it‟s not safe or it‘s too heavy, you know, like, too much

Interviewer: I see

Respondent One: And sometimes they‘re like giving us some, like, ….

Interviewer: I see. OK, well, that was it actually.

Respondent One: OK

Interviewer: Thank you very much that you gave me all that information.

(Closing )

110

Interview 3:

The results of the third interview, which was conducted in writing via LinkedIn on

Tuesday, 22nd

July 2014 at 21:00 with a flight attendant from easyJet.

Respondent: male, 30 years of age, based in Italy. Has been working as flight attendant for

easyJet for over two years

Question 1: How many years have you been working for easyJet?

Respondent: I've been working for easyJet since may 2012

Question 2: How do you perceive the working atmosphere?

Respondent: the atmosphere is very good, the environment very friendly

Question 3: Do you feel appreciated by your employer for the work you do? -imagine a

scale from 1 to 8 (8 being the best)

Respondent: - yes I feel appreciate by my managment. They often thank us for our hard

job, they organize some parties for employees along the year, when we go extra mile

they thank us using letters or emails to do so. (7 should.be the rank). Furthermore to

motivate us often we have some selling incentives to reach on board and if we get it we

receive some vouchers to spend in our boutique. Then, in december we get 2 weeks more

of our base salary, and finally every year we get some easyJet shares (easJet is quoted in

london stock exchange). I'm really proud to be part of easyJet honestly!!!!

Question 4: Do you notice an effect of the business model, which is based on low cost in

any way of your work experience?

Respondent: -i think low cost is the future model for short and medium haul. So, the

effects can be positive only!!!

Question 5: Did you pay for the training and your uniform or was it reimbursed by the

company?

Respondent: - i didn't pay for my training, easyJet managed our allocation during the

entire course. I had to pay for my lunches and dinner only. Then i paid 100€ each month

for six months (direct from my payslip) as a contribution for base training (and i think it's

right)

Question 6: What opportunities for a job promotion (and further training and

development) do you have?

Respondent:- in easyjet everyone can improve. If the company needs new figures and you

111

respect the requirements for the position you can apply. If everything is ok, you'll be

invited to an assesment day. If the outcome is successful you start the new training (all for

free, no payments are added on our payslip)

Question 7: How do you perceive the level of job security?

Respondent: - i perceive the level of job security high, very high!!!

Question 8: In how far do the unions advocate for the employees?/ Do you see benefits

from it?

Respondent: - i feel that unions did a great job for easyJet's emplyees. Not now honestly.

Unions are pushing the company too much, unions ask more and more everyday and it's

no good and if company doesn't accept union's requests they want to strike (i'm speaking of

italian branch. In every country in which easyjet has got bases, there is a different contract

for employees).

Unions are good, but not always!!!

Question 9: If you could rate on a scale form 1 to 8 (8 being the best), how satisfied are

you with your job? What are the reasons?

Respondent: - i love my job and i love easyjet. I felt me motivated everyday!!! To b

cabin crew has been the dream of mine since when i was a child and it's still so!!! easyJet

can garantuee a great future to me!!! My salary is very competitive and high, lives are

paid, ... we have a lot of benefits and i thank god everyday to be part of easyJet

family!!! ���

It's a great company and i say to everybody (who wants to be cabin crew), to join us, our

great orange family!!#