Case Memo – Alaska Airlines and Flight 261
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Case Memo – Alaska Airlines and Flight 261 It was really a critical time for Alaska Airlines, and it had never encountered such a big challenge and crisis before. Its flight had crashed; meanwhile, the NTSB reported that the recovered jackscrew from Flight 261 had no grease on it, which indicated a possible lack of regular maintenance. Most badly, the media published the letter from 64 Alaska Airlines mechanics, who disclosed some insides regarding a base maintenance manager’s inappropriate activities of contradicting federal aviation regulations, leading to dangers to operations. This letter also built more evidence that it was Alaska Airlines’ overlook, maybe long-time overlook, resulted in the tragedy. Then, the pilots posted a message on the union’s website complaining the “misconduct” of Alaska Airlines. It seemed that pilots, the most important human resource assets for an airline company, did not satisfy and trust the corporate management. Although Alaska Airlines had been run for 70 years, and had achieved great improvement during the 1990s, if it could not promptly and appropriately handle this crisis, its reputation would be totally destroyed, and it would not be a long time for an airline company to step down to demise even today is its business summit. It was time to test Alaska Airline’s capability of handling crisis management, management system and labor relations. The most important thing for Alaska Airlines was to incorporate with the government investigating panel and identify the real reason of this crash as soon as possible. The public would like to see a responsible enterprise that bravely takes on its responsibilities. We believe that Alaska Airline, a veteran in this industry, was able to deal with it. On the other hand, how to deal with the labor relations and how to respond to the letter on the newspaper and message on the web could be struggling issues. Obviously, you could not find so many successful precedents in this area, especially in this industry. In transportation industry, the unionization is the norm. The airlines must realize and recognize this fact and learn how to deal with it. The trouble that the conflicts were going to public would make Alaska Airlines involve into an extremely embarrassing situation – you could not support the criticisms and you still could not criticize the opponents – employees in your company. You could not say “no, that is not true and they are liars”, because the information came from the internal, not external. And you also could not say “yes, I have already known about it.” That means you would eventually acknowledge the mismanagement of corporate management team. This was really a big trouble! However, fortunately, there were still some possible solutions. If I were Mr. Hamel, first, I would communicate with the union panel members as soon as possible. Although there were 64 mechanics participating the complaint, the decisive power and attitude were in the announcement of the union. If the union sends a clear message to the public to criticize Alaska Airlines, it would lead to a huge and unpredictable damage. Yet if the mechanics union says some “soft” words about this letter, it could be a great help to Alaska Airlines. For example, if the union believes that this is only an individual case, but not a normal existing phenomenon, and still holds the hope to Alaska Airlines to address this issue and handle a safe operation, Alaska Airlines will secure a valuable opportunity to win back its reputation, investigate the issue and restructure its management. As such, Hamel would try his utmost to persuade the union that what the win-win solution was, and how to avoid further conflicts. Second, Hamel needed to set up a joint investigate panel with the union leaders to investigate the complaints thoroughly. If the contents of complaint were true, that manager could be fired, and the management should apologize to the mechanics and pledge to improve its management. Then, based on this issue, this investigation could be extended to a broader range to any areas concerning the safety issues. For Hamel, there are two targets for this action. First, with the cooperation and participation of union, it would make the union members, and the employees, trust the whole corporate and the management system. Second, it could be a nice start for the corporate management and union panel to test a new method to address the common problems together, and this cooperation could be a model for the future. Considering the big power of unions in the transportation industry, it is risky and dangerous for corporate to address any sensitive issues without the support of union. The next step of Hamel was to establish a regular communication and problem-solving system to co-work with the union. Of course, the union should also hold an open attitude towards the cooperation. It would be better to institute some complaint transfer, appeal and address path, regulations or advices to avoid the conflicts to go public. In fact, in this society that all the companies are trying to motivate employees to participate into corporate matters and contribute more advices, it is not a bad thing to have a labor union that can unite the employees. The key point is how to cooperate with it and treat it as a resource to develop the business but not a cause of trouble. By means of tackle this issue strategically, companies can dramatically unite and motive the employees, and finally create a long term win-win result.
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