The following two recent articles about Santa highlight some of the challenges the organization is currently facing. Please read these two articles and address the question as follows. Jockey’s reform warning irks engineers – Santa CEO Alan Joyce says out of touch union leaders are blocking reforms (Source:The Australian July 21, 201 1) SANTA chief executive Alan Joyce has incensed the airline’s engineering union with a speech warning that a restructuring to be unveiled next month which will signal the start of tough reforms.
Mr. Joyce singled out airline’s pilots and engineers as stumbling-blocks to its eve to make its more internationally competitive and efficient. He described the airline’s maintenance and repair costs as “among the least efficient and most expensive in the world”and warned that out of touch union leaders were blocking new business models. He said a pilot union push for job security would lead to Jetsam pilots being paid at Santa rates, making the low-cost carrier enviable. An alternative option of removing Jetsam from the Santa code share regime”would weaken the Santa Group network and destroy jobs”. E said. Maintenance staff were warned that they needed to follow the example of heck-in staff and accept the need for change. Joyce said new maintenance regulations issued by the Cecil Aviation Safety Authority to bring Australia into line with Europe recognized the enormous advances in aviation technologies. “The vast majority of people within our business have helped us to maximize the capabilities of these aircraft in terms of fuel efficient flying techniques and new product and service offerings,” Mr. Joyce said. But our maintenance and repair costs are among the least efficient most expensive in the world. “So it’s time to catch up. We don’t repair our cars the same way we did 40 years ago. We can’t repair our planes the same way either. ” Mr. Joyce singled out a push to stop licensed engineers from doing unneeded transit checks on modern aircraft and the introduction of a lower “A” category of license allowable under the new CASE regulations as areas that would help close the gap in the airline’s global competitiveness.
Allowing pilots to do the transit checks and giving some work to the employees with a license would free up the specialized engineers and allow Santa to catch up with world’s best practice, he said. The Australian License Aircraft Engineers Association rejected the claims but earned members to keep a level head. “Alan Joyce doesn’t want Australian aircraft engineers inspecting aircraft because we find things wrong with them,” said the association’s federal secretary, Steve Peruvians. “He’d rather take his chances that nothing goes wrong at 40,000 feet. Loud make the maintenance of my car more efficient by skipping the routine services, but eventually I would expect the engine to blow up. ” Jockey’s reform warning irks engineers. Santa refuses to rule out job cuts Santa Airways refused to rule out job cuts to help propel its international operations toward profitability amid a rise in passenger numbers from the grounding of Tiger Airways. Decisions on potential redundancies will be made as part of a new four-pronged strategy for the national carrier to be announced on August 24, 2011, chief executive Alan Joyce told BBC TV during an interview on Sunday. We have had a surplus of some tome and we’ve managed that with the big (annual) leave balances that are there,” he said. The flying Kangaroo avoided making pilots redundant during the global financial crisis by asking there to take annual leave to reduce their leave balance, and lots are doing the same in 2011. Asked whether the airline was now at the point where job cuts could not be avoided, Mr. Joyce said the issue was part of a strategic review, the outcome of which will be announced on August 24, 2011.
The Strategic overhaul will focus in future investment, cost cutting , the airline’s partnerships and its future in fast-growing Asia. Santa’ current round of wage negotiations with several unions had resulted in “some very outrageous demands” being put on the table, with some unions asking for a fee to be paid if major chances are introduced, Mr. Joyce said. The union demands were unrealistic, especially given the loss-making international business, he said. But some of the international routes were making money, and he ruled out any exit from international operations. Santa will always be an international and domestic airline. We’d like Santa to grow significantly internationally. ” Santa’ share price lost about a third of its value from November to June, as the airline battled natural disasters both at home and abroad, soaring fuel prices and it tackled negotiations with unions. But on June 22 the stock jumped after the airline announced in 2011 it will achieve its best result since the global financial rises on the strength of its domestic, freight, low-cost carrier Jester and frequent flyer businesses.
Underlying profit before tax for 201 0/11 would be $500 million to $550 million, compared with $377 million the previous year. Earnings will also be boosted thanks to Tiger Airways’ grounding which has added around 10,000 of Tiger’s 35,000 passengers to Santa’ passenger numbers.