On the Go: walking the high road at a low cost airline

Abstract

Low cost travel has proved to be extremely popular in the single European market and low cost airlines have flourished. To meet the challenge of these low cost airlines, several ‘legacy’ or full service carriers (FSCs) around the world have created their own low cost subsidiary. The most notable example in the UK was Go, initially a low cost subsidiary of British Airways (BA) that was subsequently sold to its senior management team and then bought by easyJet, the UK's leading low cost airline. For low cost subsidiaries to survive and prosper, ‘matching’ models of human resource management (HRM) predict that they need to create a low cost employment system, which will be very different from that of the parent company. However, cost is only one variable in the competitive equation. In a ‘customer facing’ industry such as civil aviation a minimum level of service quality is also required and there is clearly scope for ‘low frills’ (e.g. Southwest Airlines) as opposed to ‘no frills’ (e.g. Ryanair). Moreover, there is always the danger that (well organized) employee groups will take umbrage at walking the ‘low road’ of employee relations, especially when their colleagues in the parent airline are walking the ‘high road’. Although competing head on with well-established low cost airlines such as Ryanair and easyJet, Go was able to forge a distinctive management style that combined low cost operations with high road employment relations. The airline's flight crew appreciated this style of management and ‘bought into’ the company's business strategy, unlike their counterparts at other low cost airlines or indeed the parent company.