Concessions Conference Deals with Labor Issues

Centerlines Article by Monica Hargrove

 

The third session of the Concessions Conference      featured a panel addressing labor and economic concerns that have been hot topics of discussion in the airport concessions trade press. Panelists included: Bhav Tibrewal, analyst with labor’s Unite Here’s Airport Group; Bruce A. Seaman, a Georgia State University economics professor who has researched aviation labor and economic issues; and Eric T. Smith, an attorney from the Pittsburgh office of Schnader Harrison Segal Lewis, who has represented airports in writing concessions agreements.

 

Smith gave the audience a brief primer on labor law issues that should be considered by airports when assessing concessions models. He outlined the law on how unions may come to represent concessionaire’s employees and the fact that it is more difficult and more expensive to organize many small units as opposed to one big group of employees (such as under a master concessionaire model). Smith also discussed the range of tools available to address labor issues, such as labor peace agreements and employee retention programs. He also highlighted the potential economic impact of labor discord upon airports and their tenants. Also covered were practical considerations in choosing a concessions model such as distributing risk of labor issues between multiple entities vs. having one or two large companies whose issues may have greater impact upon the airport if adverse labor matters arise.

 

The panel covered five major areas of importance in considering the choice of concessions arrangements at airports:

  • Net airport revenues
  • Airport concessionaire turnover
  • Airport disadvantaged, small, minority, and women’s businesses
  • Airport concessions employee wage and benefit levels
  • Risk of labor strife in airports concessions operations

Each of the panelists gave their perspectives on whether the choice of concessions model – developer, master concessionaire, individualized tenant or a hybrid – had an impact on these issues.

 

It was clear from the discussion that much more research is needed to bring closure to the five issues discussed by the panel. Unite Here has done some analysis on the five issues as they relate to the developer model. Seaman suggested that there is insufficient information available from which one could draw any conclusions which airport concessions model impacts significantly any of the five issues discussed. Smith pointed out that a number of issues influence an airport’s choice of concessions model, and that there are approaches available to address labor strife and to maximize airport revenue generation, reduce concessions turnover, promote opportunities for disadvantaged businesses, as well as to ensure competitive wage and benefit programs for airport’s concessions employees, under any airport concessions model.