A leading airline chief executive has described trade union agreements as “handcuffs” on traditional carriers.
James Hogan, head of Etihad Airways, blamed “restrictive political and industrial agreements” for inflexibility among long-established airlines.
Hogan told the World Travel and Tourism Council (WTTC) summit in Abu Dhabi: “Airlines are burdened with costs and there has been considerable inflexibility in the legacy model.
“The mind set is wrong. In the US recently I asked a ground handler, ‘Are you a member of the airline or the union.’ Unfortunately, he said the union.
“To new entrants like Etihad, the ability to achieve lower unit costs is fundamental. We weren’t burdened by the legacy handcuffs – union agreements, multiple hubs.”
Abu Dhabi-based Etihad has grown in 10 years to become a major network carrier alongside neighbours Emirates and Qatar Airways.
Hogan said: “Asian carriers were able to break the handcuffs a bit – the deals with engineers and pilots that may have been relevant 20 years ago but not today.
“But unless there is radical change it will be tough for legacy carriers to achieve the change they need. Inflexibility is a real barrier.
“Legacy union agreements stop an airline moving forward.”
Hogan said there are no unions at Etihad. He added:: “At Etihad, we don’t call human resources HR, we call it ‘people and performance’, because performance is fundamental.”
Former British Airways boss Willie Walsh, now chief executive of BA parent IAG, agreed with Hogan on the need for change in union agreements.
Walsh told the summit: “The traditional way to avoid disputes was to give in and that is why the industry has not made any money.”
He said: “You have to be prepared to accept some friction. This is an industry that needs to change. It is about the rate of change.”
Walsh oversaw an 18-month dispute with cabin crew at the end of his term running BA, while sister carrier Iberia was grounded recently by strikes against 4,500 job losses