LSCMS Blog

In a country already plagued with high costs, trucking operators will pay almost 7 cent more for diesel from July 1, 2014 under the Federal Government’s carbon tax package.

Unveiling the reform recently, Prime Minister Julia Gillard announced that the trucking industry would be exempt for two years when the tax begins on July 1, 2012.

The scheme will begin at $23 per tonne of carbon, rising to $24.15 the following year and $25.40 in July 2014 before moving to a market-based emissions trading scheme in 2015.

The $25.40 tax will increase diesel prices by 6.85 cents through a reduction in the fuel tax credit rate, which will continue to decline as the cost of carbon increases.

Once implemented, trucking potentially faces a double whammy on diesel prices from July 2014 because the fuel tax credit is reduced at the beginning of each financial year to account for government expenditure on the road network.

These costs could be further compounded by higher wages as CPI will move upwards as cost of food and other items will increase. Overall sad news for the competiveness of Australia’s trucking industry.

South Africa’s Competition Commission has fined Singapore Airlines ZAR25.1 million along with South African Airways ZAR18.8 million (US$2.35 million) for price-fixing on routes between Johannesburg and Hong Kong.

The fine settles another investigation into South African Airways, which was accused of collusion over domestic fares and international freight rates during the 2010 football World Cup, citing a statement from the anti-trust authorities, reported Agence France-Presse.

“SAA has offered its full cooperation to the commission in its ongoing investigations and prosecution of both the matters,” the statement said.

“Similarly, Singapore Airlines undertook to do the same with regards to the Far East matter.”

No separate ruling was made against South African Airways in the World Cup enquiry, however, the Competition Commission was cited as saying that the fine will settle the matter.

Not surprisingly, Air New Zealand has trumped Australia’s own national airline in a survey of customer satisfaction across the ditch.

It was named the International Airline of the Year in the inaugural Roy Morgan Customer Satisfaction Awards in Australia last week.

Roy Morgan surveyed nearly 4000 people who’d used an international airline in the previous 12 months. Air New Zealand won more months than any other airline in 2011 and achieved an average satisfaction rating of 89 percent.

Air New Zealand Australia general manager Cam Wallace says the award is a great honour.

“For years we’ve pursued a strategy that recognises that our people rather than planes are our most valuable asset and it’s really pleasing to see that acknowledged by the people who fly with us.”

He says the award reflects the company’s commitment to delivering customers a uniquely Kiwi experience in what is one of the world’s most competitive industries.

Roy Morgan Research chief executive Michele Levine told news.com.au Qantas also rated highly in the international category, despite the negative publicity surrounding November’s grounding.

“In 2011 we saw pan-Asian airlines performing well with Cathay Pacific, Malaysian Airlines and Singapore Airlines performing well throughout the year,” Ms Levine says

QANTAS has been fined $US40,000 ($37,00) by the US Department of Transportation for violating deceptive price advertising rules.

The airline fell foul of US laws and departmental rules after it displayed advertisements last year on numerous websites without providing information on extra taxes and fees.

The department said that even those consumers who clicked on the advertisements were taken to a Qantas web page where sample routes and prices were displayed — but the additional taxes and fees could only be seen if they scrolled to the bottom of the page.

Qantas said it had moved quickly to address the department’s concerns, and apologised for any confusion it had caused to customers.

The action against Qantas comes as US requirements were strengthened from January 26 to require any advertising to state the full price to be paid by the consumer, including all carrier-imposed surcharges.

Perhaps taking a leaf out of Qantas’s book, India’s Kingfisher Airlines’ management has threatened to shut down the carrier at a meeting with pilots.

Ceo Sanjay Aggarwal, upbeat about refinancing a few days ago, responded to a pilots’ threat – to stop flying flights if they are not paid their owed salaries – by threatening closure.

The airline has since clarified the threat, saying it is not planning to exit the market.

Elsewhere, the government’s tax department has frozen Kingfisher’s 40 bank accounts for the fourth time in four months over a US$8.16 million debt.

Qantas denies claims by the Transport Workers Union it has failed to meet Fair Work Australia requirements after announcing it’s shedding 500 jobs.

On Friday the TWU said Qantas had failed to meet Fair Work Australia requirements in shedding 500 jobs and should be prosecuted with the full force of the law.

Qantas on Thursday announced it was making 500 jobs redundant after the airline reported an 83 per cent slump in half-year profit due to rising fuel costs and losses related to the grounding of its fleet last year.

Transport Workers Unions national secretary Tony Sheldon said the TWU was prepared to “fight for the heart and soul of Qantas”.

“The company clearly breached its requirements under the Fair Work Act and we’re calling on the Fair Work Ombudsman to prosecute Qantas with all the strengths of the law,” Mr Sheldon told reporters in Sydney on Friday.

“They have an obligation to consult, negotiate and have proper conversations and engagement with their work force when restructuring occurs.”

But Qantas spokeswoman Olivia Wirth dismissed Mr Sheldon’s comments as “baseless”.

“Qantas has complied fully with its obligations under the Fair Work Act and collective agreements with employees,” Ms Wirth said in a statement.

“Qantas has spoken to affected employees and briefed the relevant unions.

“Qantas is working to reduce the number of redundancies and we will provide generous packages and assistance to those affected by the changes.”

Ms Wirth said the comments were part of Mr Sheldon’s ongoing campaign against Qantas.

“This week the TWU failed in its appeal in the Federal Court, meaning it will be forced to pay Qantas over $700,000 for delaying flights and disrupting passengers when it undertook an unlawful strike at airports around Australia in 2009,” she said.

Mr Sheldon said it was clear the airline was planning to outsource the jobs, despite Qantas denying such a plan.

“It’s clear the Australian people have got one foul liar running a company and destroying the company,” Mr Sheldon said of Qantas CEO Alan Joyce.

“It’s become clearer and clearer from both statements within Qantas management privately, and from our politicians in Canberra on both sides of the house, that Qantas intends to strip the flying kangaroo and Jetstar in an operation to maximise profits for the executives.”

Qantas had consistently breached undertakings it had given to the workforce in the last 12 months, Mr Sheldon said.

The ongoing dispute between the TWU and Qantas is expected to be heard before FWA in March, after the industrial umpire intervened when the airline was grounded for two days last October.

“What (yesterday’s announcement) does is put another nail in the coffin of our working relationship with the Qantas/Jetstar group,” Mr Sheldon said.

“This is a company that has ruthlessly decided that the kangaroo has to be slaughtered in this country and we’re not going to let that happen.”

Commncing Monday 20th February, the Logistics & Supply Chain Management Society will be featured on Channel News Asia’s, Invest In Me show that airs at 8.30 p.m. Singapore time with repeat telecasts being shown throughout the week. Episodes can also be downloaded from the Channel News Asia website.

In this programme, the Society shows its support in helping social enterprises in the region by providing Logsitics advice and hands on expertise to an events company with Logistics issues. Follow us as we make this journey with the Society’s President, Raymon Krishnan and other individual and corporate members towards resolving some of the common Logistics issues faced by SME’s.

Past episodes of the programme can also be viewed online at - http://www.channelnewsasia.com/investinme

In an earlier post, we reported how Air Asia had managed to trump Singapore Inc  by securing approval to fly out of Sydney from April 2012.

In a new development, it was recently reported in the press that the Australian Competition and Consumer Commission were taking legal action against AirAsia, as the airline failed to display its full airfare prices, inclusive of all mandatory charges, which went against the Australian Consumer Law.

AirAsia has reportedly taken “corrective action” to resolve its online airfare lawsuit with The Australian Competition and Consumer Commission (ACCC) and alleged that the inaccurate airfare costs arose due to an IT issue, and that they sought to resolve the matter with ACCC.

“As soon as we became aware of the matter based on the ACCC’s complaint, we have taken corrective action and are focused on ensuring that our customers have all relevant information on our fares,” the carrier reported on its website.

We attended an industry symposium earlier this week and the presenter from K Line shared some interesting facts with us. Many of our readers are probably aware of this information but we thought it interesting enough to share this with those, who like us, were not.

- It cost carriers US$ 1 million each time one of their vessel transit the Suez Canal

- A container vessel burns about US$88,000 per day or around $4,500,000 in fuel per round voyage

- Asia Europe Capacity growth stands at about 13 – 15 % but the market is growing at about 5% (which is down from the forecast of 7% growth earlier this year). Coupled with news that we have been hearing elsewhere, it looks like carriers could have to resort to withdrawing capacity like they did in 2009.

ED

It was recently reported in the times of India that the sexual temptation produced by the here-today-gone-tomorrow aviation lifestyle is producing a disproportionate number of divorces.

“Around 300 cases of divorce and open relationships have come to me in the past four years, of which 70 per cent come from the aviation industry,” said marriage counsellor Nisha Khurana.

“A number of marriage counsellors in Gurgaon and Delhi, whom I have worked with, agree that the industry has a high rate of divorces, which is primarily because of the nature of work, hectic hours and long stays out of home,” Dr Khurana said.
A typical working day in an aviation worker’s life is spent either in the airport and flights, or in different cities where they have to stay over, said the report.

“We fly around eight hours a day and on an average, spend four days a week away from home. Even on the days we get back home, we usually end up taking enough rest before we start work again,” said Oman Air pilot Koustuv Goswami.

An unidentified pilot said loneliness of the flying life induces aviation workers to give into vices which lead to infidelity and divorce.
Said another unidentified fifty-something pilot: “When people around you don’t frown on things like these, you gradually start accepting them as a norm.”

This pilot, now living with his flight attendant girlfriend, divorced his wife of 20 years. “I love to have a lot of women around me, and I do. I really tried to make my marriage work initially, but could never derive much happiness out of it. Now I’m happily single again, and now feel much happier,” he said.

Most cabin crew members, said the report, find it difficult to avoid temptations, especially with all the money around.
“I started working at the age of 18 with a starting salary of INR80,000 (US$1,670). For the first few years, I just spent all my money on alcohol and drugs. It is like a black hole that just sucks you in till you realise that there’s no going back,” said the former 29-year-old female flight attendant, now attending the School of Open Learning in Delhi University, after quitting her job with Qatar Airways