Low cost carrier implications for human resource management
The chapter discusses the human resources (HR) practices associated with the low cost model and the impact of competition from these airlines on the Human Resource Management (HRM) strategies of traditional full service or legacy carriers. The theory of strategic HRM predicts that a low cost business model is predicated on a "low road" approach to people management, but Southwest Airlines does not conform: as the pioneer Low Cost Carrier (LCC) and one of the most successful global airlines over the past 40 years, it also manages staff with a high road alternative. HRM is extremely important to the success of airlines in the liberalised era of civil aviation, wherein competition between airlines is far greater than it was previously. Workers can provide airlines with a productivity and/or service advantage. LCCs have used subcontracting in order first to outsource non-essential functions and then more recently to outsource core functions in order to allow market forces to reduce the cost of these functions.