TLAW,
About 5 years ago as the pace of the resources boom in WA was really starting to accelerate, several publicly listed mining companies realised they were losing skilled employees (geologists, heavy machine operators, diesel mechanics, etc) to bigger operators and that such a continual labour drain would progressively impact their long term competitiveness. A google search by any interested poster will turn up the associated media.
After looking at the alternatives some of the miners advised the ASX they were implementing a deliberate one time short term profit reduction, to fund provisions to significantly increase wages and improve staff terms and conditions, to arrest the skilled worker losses and become more attractive employers in the labour market.
On receiving this news did the market punish the miners for deliberately reducing the profit that year?
No, the market was well aware of the labour market pressures and understood the need for management to fund T & C increases to retain, preserve and attract the most valuable resoure of all - skilled and dedicated labour. The market responded to these announcements positively and share prices either didn't change or increased, with the media support of labour and mining market analysts, who saw the move as sensible and providing for a sustainable future.
Aviation is a very capital intensive business, just like mining. I think the 'race to the bottom' in aviation experience, skills and associated T. & C.s results more from naval gazing airline managers, who are too close to their own problems and lack the insight to look at other similar industries (mining in this case) for inspired solutions to these problem.
Uninspired management always looks to the accountants (CFO's) for advice and the problem with accountants is they know the price of everything and the value of nothing. Which is why their answer is always to cut costs.
The Oracle