LSCMS Blog

News of a 71% pay hike for Australian airline Qantas’ chief executive Alan Joyce has ruffled some feathers with the pilots in the country.

Australian pilots have labelled the pay decision as a “disturbingly typical display of hypocrisy”, as the airline just recently announced plans to cut 1,000 jobs. Qantas has also been caught in a year-long dispute with unions over job security and workers’ pay.

Qantas’ annual report showed that Joyce would earn about A$5 million (S$6.4m) in cash and benefits this year, a step up from the A$2.9 million (S$3.7m) he received in 2010.

The airline has defended itself, claiming Joyce’s pay is still below amounts paid to other senior executives in top-ranking Australian firms, AFP reported.

“Joyce’s salary is not excessive compared with other large Australian companies,” a Qantas spokesperson said. “His actual salary in 2010/11 was 9% lower than last year, and Qantas executives have not been awarded a cash bonus for the past two years.”

The Australian and International Pilots Association (Aipa) has voiced its unhappiness over the news.

“To hand yourself a 71% pay rise, while simultaneously sacking a thousand Aussie workers, smacks of breathtaking arrogance,” Captain Richard Woodward, vice president of Aipa, said.

Qantas’ net profit doubled to A$250 million (S$320m) this year, but the airline is still wary of future challenges as it refocus business strategies on the Asian markets.

The dynamism and complexity of the Asia Pacific transport and logistics market offer investors and operators the industry’s best prospects for growth and returns.

This is one of the key conclusions of Asia Pacific Transport and Logistics 2011, the latest report from the UK’s Transport Intelligence group which paints this somewhat optimistic view . While logistics companies in Europe and North America are coming to terms with long-term weak economies, Asia offers more opportunity.

The report identifies three key drivers of growth. First, there is the rapid development of the Chinese economy which shows little sign of slowing, and its progression from low-cost manufacturing base to high-value production location is marking a new stage in its evolution.

As labour costs rise in China, production is spilling over into neighbouring, lower cost markets. Both trends offer numerous opportunities to freight forwarders and contract logistics providers.

Second, the integration of the leading Asian economies is proceeding fast, with free trade agreements reducing barriers to international commerce. Logistics companies can increasingly view parts of the region as a single market.

And finally, governments throughout the region are investing in many transport infrastructure projects as intra-regional trade increases, facilitating the provision of logistics services.

Emerging countries such as Laos, Cambodia and Sri Lanka have seen major boosts in their economies as the number of manufacturing operations increase and disposable income rises.

As a result, these countries are rapidly ramping up projects to build airports, roads and rail networks to compete in the global economy.

Commenting on these key trends, the report’s principal author Cathy Robertson said: “Although the region will remain an export leader for years to come, the growing intra-regional trade is creating an intricate supply chain particularly as China advances to more skilled manufacturing and lower value production migrates to other Asian countries.

“Growth in contract logistics, express and freight forwarding services is expected to maintain double-digit increases through 2014 with China and India leading the way.”

Aspiring female flight attendants in South Korea have raised concerns over Garuda Indonesia’s strange recruitment checks.

The Korean women were vying for a job as flight attendants on Garuda Indonesia and one candidate said women were required to strip down to their panties to screen for tattoos and breast implants. Some also had their breasts handled during medical check-ups. Many applicants complained the procedure was embarrassing and uncomfortable.

An official for the Indonesian airline said it has a religion-based policy that cabin crew members are not allowed to have tattoos. Job applicants in other countries such as Japan and Australia have to undergo similar body checks as well.

“The hand examination on breasts was held since those with implants can have health issues when air pressure falls during flights,” an airline official told Yonhap news agency.

The spokesperson added that the process was conducted with the consensus of the candidates.

Garuda’s Seoul office has denied part of the accusation and claimed the women did not have to remove their bras as its staff only “lightly tapped [the] upper side of their breasts”. It added that a female Korean nurse was present with the doctor during the entire check-up.

“Those who passed the check-up said they felt no shame in the process,” the airline said. It further claimed that a physical check-up on potential staff was a common practice among airlines.

However, the move has ruffled the feathers of some industry peers and women’s rights group, which called the checks “unnecessary and intrusive”.

All workplaces in Singapore will be covered under its Workplace Safety & Health (WSH) Act from September since it was first extended to factories in March 2006 and then into six other sectors two years later to allow industries to adjust.

This latest extension brings on board more than 100,000 organisations with over 1.6 million employees, or about half of the Singapore workforce.

Companies and employees now covered under the law will need to take reasonably practicable measures to ensure workplaces are safe such as proper risk management or taking steps to identify and manage the existing risks in one’s workplace to prevent work incidents.

Aside from the coverage extension of the WSH Act, other key changes were also effected which include: chain of responsibility; enhancing the definition of Occupational Diseases to include any that are attributable to chemical and biological agent exposure at work; and the WSH (Noise) Regulations which took effect on 1st September.

“The workers now can feel much safer at work now with the WSH knowledge that is available. They now understand the importance of WSH, how it can impact one’s life, and what management can do to improve the standards at the workplace,” said WSH alignment director for National Trades Union Congress (NTUC) Yeo Guat Kwang.

It is necessary for workers to feel safe and be covered by workplace legislation that protects them however the Singapore government, like most other governments need to ensure two things. Firstly, that the implementation of the Act does not increase costs unnecessarily and drive businesses away and secondly, remove the sense of personal responsibility excessive legislation brings about.

THE Air Transport Rating Agency (ATRA) has named what it considers to be the ten safest airlines in the world.

It compiled its list not only from historic accident rates, but by assessing airlines on 15 criteria such as net financial result, average fleet age, in-house maintenance capability and dedicated full-flight simulators. It trumpets a similarity between its technique and that used by the World Health Organisation

It is interesting to consider how to respond to the rating. Would anyone choose, say, British Airways over Singapore Airlines because of the former’s place in ATRA’s list? After all, Singapore is considered a safe carrier. Flyers might, though, choose Singapore ahead of BA for its service. Passengers are probably more used to the notion that the world’s leading airlines offer varying degrees of comfort, than that they offer varying degrees of safety and infact would seldom consider this in their criteria when choosing which airline to fly. ATRA’s work might change that mindset.

ATRA’s ten safest airlines (in alphabetical order):

1. Air France-KLM,
2. AMR Corporation (American Airlines, American Eagles),
3. British Airways,
4. Continental Airlines,
5. Delta Air Lines,
6. Japan Airlines,
7. Lufthansa,
8. Southwest Airlines,
9. United Airlines,
10. US Airways