American Airlines Case Organization

Topics: Southwest Airlines, Northwest Airlines, Delta Air Lines Pages: 1 (270 words) Published: December 18, 2012
The airline industry faced a severe downturn after the September 11 attacks. American Airlines was one of many airline carriers that were affected by the tragedy that took place on this day. While other corporations were able to stay afloat, American Airlines suffered because of the trouble it had within the organizations. American Airlines struggled to stay intact when conflict antecedents came into play. These included an economic recession, rising energy costs, and losses incurred by corporate cost-saving measures. During this time, American Airlines felt conflict, in which their losses were estimated at $5 billion. In order to manifest the conflict they were in, A&A turned to cutback wages for airline workers (who accounted for 36% of total operating costs). This action caused a negative aftermath for A&A. What A&A failed to do was to create a win-win conflict resolution. Management failed to recognize the losses that would occur if they cutback on wages of their employees. At the expense of their workers, A&A management was able to stay away from sinking in the industry temporarily. The best possible integrative approach to negotiate between the two parties would be to follow United Airlines approach, where 60% of ownership lies with the airline workers. This approach would function for the benefit of both parties as if profits increase, so will compensation for the airline workers. What A&A failed to do was recognize that their most valuable asset was their workers. Although they take up 36% of their operating expenses, their contribution is what generates revenue for the firm.
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