They made sense at AMR too, as they do in other industries

Commentary by ANN Reporter Juan Jimenez

In another short-sighted labor union reaction, the United Airlines Flight Attendants Association is criticizing an action on the part of airline management - UAL in this instance - which is common practice in all industries as well as every one of the military services.

Retention bonuses are key strategic tools used by companies to induce key employees into staying onboard during tough times. The fact is that experienced Information Services management-level personnel are crucial to the survival of any airline, and they are also in great demand in the general IT marketplace.

The reason is simple: companies value real-world experience in large-scale IT environments because those employees bring with them insights and experience that can make it much easier for smaller companies to implement effective IT solutions. When it comes to large-scale IT departments, few industries can rival the airlines.

The other stark reality is that flight attendants, pilots and mechanics simply do not enjoy the same job market demand. No one is suggesting that flight attendants, pilots and mechanics are not important, but the fact remains that at this time, in this labor market, there is no need to offer retention bonuses to these sectors of the airline's workforce because there is no shortage of applicants for the positions.

In contrast, UAL is not in a position to afford having to start searching for personnel to replace these key employees and try to convince them to come onboard when the company has little more to offer them than a paycheck and the very real potential of a pink slip. Does anyone seriously think that UAL would be able to replace those people by offering the same salary and benefits?

Even if they manage to find these replacements, the company would then be forced to wait until the new employee goes through the long learning curve to master the company's systems and become effective in their positions. In the meanwhile, the department's productivity suffers - a condition that resonates like the proverbial domino effect throughout the entire company.

I personally know of more than two dozen key employees in airline IT departments who bailed out of the airline industry after 9/11 and doubled their salaries within days. I wonder how many flight attendants at UAL have any clue how hard it is to find and train a replacement for an experienced IT manager or senior analyst who has amassed a great amount of knowledge of the inner workings of the systems, software and hardware that an airline operates? I know first-hand the answer to this, because in my nearly 30 years of experience in the IT industry I worked in and still have many contacts in the airline industry.

Not only are the retention bonuses the right thing to do, they are the smart, fiscally responsible thing to do. They are also the right way to protect shareholder equity as well as the airline's ability to provide an indispensable infrastructure without which no one at the airline would have a job. This applies just as equally to UAL as it did - and still does - to AMR.

FMI: www.ual.com