Month: November 2010

Air Canada was among a handful of airlines FINED by European Union officials Tuesday for fixing cargo prices. Altogether, EU anti-trust regulators fined 11 air cargo carriers $1.11 billion US. The carriers co-ordinated surcharges for fuel and security without discounts over a six-year period from December 1999 to Feb. 14, 2006.

In the biggest case, Air France was ordered to pay $474 million US — a HEFTY fine. Air Canada faces approximately $29.2 million US in fines. Air Canada’s penalty was reduced by 15% because of its willingness to co-operate with the commission. Air Canada said it can “more than adequately” cover the fine by dipping into the $125 million it put aside for this purpose in 2008.

For those of you who don’t know about cartels, they are an agreement among competing firms who agree to fix prices, marketing, and production. This relates to business ethics in that, by creating a monopolistic-like atmosphere,  it fixes prices to maximize company profits, while maintaining extremely high prices at the expense of the consumers.

I’ll leave you all with a video regarding the cartel scandal and a quote by vice-president for competition, Joaquin Almunia, stating that “it is deplorable that so many major airlines co-ordinated their pricing to the detriment of European businesses and European consumers”.

There are many things that I find WRONG with Canadian Cellphone Carriers. Recently I have been helping my friends search for new cellphones plans, only to find out that cellphone plans are 1) expensively priced and 2) don’t give enough “bang for your buck”

However, during my search, I ran into a new Canadian carrier called  “Mobilicity” (their logo below)

When I saw their plans, my eyeballs nearly dropped to the floor. Their plans are unlike ANY carriers! They’re cheapest plan is $25 per month, (which they call their “Unlimited Plan”). Subscribers get UNLIMITED calling, UNLIMITED texting & picture messaging, and Caller ID… all of that on NO CONTRACT! For $10 extra per month, one can receive UNLIMITED data.. (other carriers charge 30$ per month for only 1 gigabyte!!) This is unlike anything I, along with any other Canadians have seen!

Now, I had a conversation with a Mobilicity representative who explained to me why their prices are so unbelievably cheap. There are two parts to it. The first part, is that Mobilicity is “eliminating the middle man”, in that they have erected their own cell phone towers, instead of paying Rogers, Telus or Bell for THEIR cell phone towers (Wind Mobile, Virgin Mobile do this!). Secondly, Mobilicity has eliminated all the corporate structuring that other Canadian cell phone companies have: Mobilicity runs independently, which eliminates all costs associated with payroll at the corporate level.

This may seem ingenius, but this is commonplace in other countries, where cell phones plans are just as cheap as Mobilicity’s: (take a look at the graph above!)

Lets just hope that Mobilicity isn’t bought by the existing Canadian companies (like how old Fido was) .. which would be a step-forward for monopoly-like prices, and a step-back for Canadian consumers…!

In class last week, we were learning about assets, and what they mean to a company. Well, we also learned that people are a major asset to a company… and are sometimes a company’s biggest asset.

I believe this is the case, however I suppose it debatable. A company that fully believes that a people are their biggest assets is the company Virgin. Virgin spends a lot of time finding the right personalities to run their companies. It is sometimes a challenging task because Virgin seeks managers that have all the listed qualities:

1) good listeners
2) inventive yet organized
3) determined, yet ready to enjoy themselves

It is hard for Virgin to the find the right personalities to run their companies,because not only must managers take their roles seriously, they also need to see the lighter side of life and care passionately about the company (and not just their status within it)

Virgin is a firm believer of the saying: “Rot starts at the top”. This saying describes how the poor attitudes of “rotton” management will spread down to employee.s

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What do you all think? Do you agree that Virgin is correct in that a company’s biggest asset is their EMPLOYEES?