Singapore Airlines Teams Up With India’s Tata Sons

International carrier Singapore Airlines and Indian conglomerate Tata Group signed a Memorandum of Understanding (MoU) last Thursday to establish a New Delhi-based full-service carrier. The two companies will initially invest $100m in the new airline. Tata Sons will hold 51 percent equity while the residual will be owned by Singapore Airlines.  

Singapore Airlines Teams Up With India’s Tata Sons

Investment Climate in India’s Aviation Industry

India’s aviation industry had been weathering turbulent times. Little or no growth in passenger traffic and extraordinary high taxes levied on jet fuel are few of the reasons to blame. In order to improve this condition, India’s aviation industry was opened to foreign investors last September allowing overseas companies to own up to 49 percent of local carriers.

Competition in India’s Aviation Space

Singapore Airlines’ interest in India’s aviation industry comes just nine months after Tata agreed to a similar venture with Malaysian budget carrier AirAsia. Moreover, UAE’s Etihad Airways started a Joint Venture with Jet Airways earlier this year. With Kingfisher Airlines’s temporary absence leaving a void in full-service space, this joint venture could not have come at a better time.

Long-Term Investment Strategy

The full-service airline to be launched will initially fly on domestic routes. Analysts believe that Tata intends to follow a hybrid business model of continued presence in both low cost and full-service model. Tata’s AirAsia joint venture will dominate ASEAN routes while the new full-service venture will be focused on west-bound travel in the long run since Indian government has restrictions in allowing airlines with less than five years of operations within India to fly abroad.

Growth Potential of India’s Aviation Industry

India’s rising middle-aged population with high disposable income makes it an attractive market for big international airlines. Indian government forecasts that domestic air travel will nearly triple this decade as airlines connect its smaller cities. Analysts believe that India’s aviation industry has sustainable growth potential.
It is expected that this joint venture will stimulate market demand and contribute to the expansion of the market.

Reference Links:

1. http://uk.reuters.com/article/2013/09/22/uk-airlines-india-sia-idUKBRE98L02C20130922
2. http://www.bbc.co.uk/news/business-24170625
3. http://timesofindia.indiatimes.com/business/india-business/Tata-Sons-and-Singapore-Airlines-to-set-up-new-full-service-airline/articleshow/22762014.cms
4. http://newindianexpress.com/business/news/Tata-Singapore-Airlines-team-up/2013/09/20/article1793556.ece
5. http://www.thehindu.com/business/Industry/tatas-resurrect-alliance-with-singapore-airlines/article5146028.ece
6. http://articles.economictimes.indiatimes.com/2013-09-20/news/42252558_1_singapore-airlines-jet-konnect-jet-airways

Bank of America Fined US$2.2 Million Over Racial Discrimination

Bank of America has been ordered to pay nearly US$2.2 million in restitution for racial discrimination against more than 1,100 African-American job seekers, the U.S. Department of Labor announced on Monday.

Background

The verdict comes after nearly two decades since an administrative complaint was first filed against the company in 1997. The Labor Department had conducted a review of the bank in 1993 and found “systematic hiring discrimination” against African-Americans.

Systematic Racial Discrimination in Hiring Practices

African-American applicants hoping to secure entry-level administrative jobs and teller positions faced discrimination at the company’s offices in Charlotte, North Carolina, at various times between 1993 and 2005. The judge ordered the ruling after it was found that the bank applied “unfair and inconsistent” selection criteria resulting in the rejection of qualified black job seekers.

The Ruling

As per the Department of Labor's ruling, US$964,033 will be awarded to 1,034 applicants who were rejected for jobs in 1993, and US$1,217,560 to 113 applicants rejected between 2002 and 2005. Bank of America has also been ordered to extend suitable job offers to 10 former applicants as positions become available.

Two Similar Cases

In August, the bank agreed to pay US$160 million to black financial advisers at Merrill Lynch who claimed that racial discrimination led them to be kept off lucrative assignments and that they were paid less than their white counterparts. The allegations came from before Bank of America acquired the investment bank in 2009. Earlier this month, the bank again agreed to pay US$39 million to women who worked at Bank of America and Merrill Lynch brokerages claiming they were not given an equal chance to succeed.

Bank of America, the second-largest U.S. lender by assets, said it is examining the recommended court order.

Reference Links:

1. http://money.cnn.com/2013/09/24/news/companies/bofa-racial-discrimination/index.html?iid=SF_BN_LN
2. http://www.wltx.com/news/article/250503/2/Bank-Of-America-Fined-22-M-For-Racial-Discrimination
3. http://www.newsobserver.com/2013/09/23/3222193/bank-of-america-ordered-to-pay.html
4. http://www.bloomberg.com/news/2013-09-24/bofa-told-to-pay-2-2-million-in-race-bias-case-spanning-decades.html
5. http://www.nydailynews.com/news/national/bank-america-discriminated-blacks-pay-2-2-million-article-1.1465391
6. http://www.theaustralian.com.au/business/latest-news/bank-of-america-to-pay-for-discrimination/story-e6frg90f-1226725956213

BlackBerry to Slash 4,500 Jobs

BlackBerry smartphones, once a symbol of corporate and political power, show symptoms of losing the handset war.

BlackBerry’s Bleak Results

BlackBerry halted trading of its shares last Friday afternoon only to announce that it would lay off 4,500 employees i.e. almost 40 percent of its workforce worldwide. Moreover, the company anticipates a net operating loss of between $950 million and $995 million in the quarter ended August 31. Shares plunged by 20 percent when trading resumed.

Current Market Scenario

According to the research firm Gartner, BlackBerry represented 51 percent of the North American smartphone market about four years ago. However, the company had been struggling to regain market share from Apple’s iPhone and Samsung’s Galaxy Phones.

BlackBerry’s CEO Thorsten Heins

What brought about the recent demise

The company had assumed its fate will turn around after the launch of the Z10 touchscreen device- the first smartphone powered by BlackBerry 10 operating system. Unfortunately, Z10 phones failed to enthuse customers. Moreover, failure of this line of phones led to speculation that the company would eventually break apart and thus, corporate and government IT departments have refrained from committing to BlackBerry 10 phones.

BlackBerry close to an end

BlackBerry executives are now considering exploring strategic alternatives. However, the company’s move to cut jobs and probability of incurring further losses will definitely make it difficult to find potential buyers.

Some Reference Links:

BlackBerry to slash 4,500 jobs in restructuring

BlackBerry warns of big loss, 4,500 job cuts; shares dive

Barclays Suffers Costly Cyber Attack

Barclays Suffers Costly Cyber Attack

According to a report published by KPMG- a business consultancy firm, CYBER ATTACK is more likely to cause the next systematic shock to the UK banking industry rather than a liquidity crunch. Barclays plc, the seventh largest bank in the world, stands proof to this statement. Approximately 1.3 million pound cash was siphoned off from the accounts of Barclays’ customers by a gang of cyber-robbers.

How they attacked

The cyber attack took place at the bank’s Swiss Cottage branch in April. A member of the gang posed as an IT engineer in order to gain access to the branch and attached a device known as a KVM (Keyboard, Video and Mouse) switch to one of the branch’s computers.

This device which also has a 3G router attached allows a user to control multiple computers. This device helped members of the gang transfer money from customers’ account to an account of their choice. The device can cost only 10 pound and is widely available in computer stores or online.

Following a lengthy surveillance operation led by Metropolitan Police’s Central e-Crime Unit (PeCU) and Barclays security team, eight men were taken into custody from a flat nearby Marylebone. Property including cash, jewellery, drugs, thousands of credit cards and personal data has been seized following searches of properties in Westminster, Newham, Camden, Brent and Essex.

The arrests come after four men appeared in court accused of a failed attempt to take control of computers at a Santander branch in southeast London, again using a KVM device. Although Barclays claims to have recovered a significant portion of the funds stolen, customers are raged for being kept in the dark regarding this security breach.

Last words

Given the imminent cyber threat currently hanging over UK banks, it is high time that these financial institutions make cyber security their top priority.

End of Traditional Thinking

Back when we were kids, we were told that if you study hard, complete your homework on time and score high in your exams, you will win a prize. Winning the 1^st prize was equivalent to how Lionel Messi would feel if he were to win the Football World cup. Then we began to grow up. These prizes evolved into bigger things such as getting admission in the top rated colleges, graduating in the top ten percentile, landing a job in the “Forbes Best 50 Employers’s List” companies and finally, earning a lot of money. But times have changed now.

Forbes 70 Most Powerful People Cover

It seems as though students in Bangladesh understood the constraints facing the government in terms of providing free education and guaranteed employment way before the civil servants. These bright minds realized that following the traditional path to success no longer ensures achievement of success. Therefore, they decided to write their own fortune by investing time into “Projects” that would yield money instantly.

These projects range from freelancing to Facebook marketing, home tutoring to owning online businesses, working part time in coaching centers to playing the role of a full-time news reporter etc. These projects, in reality, help beef up an individual’s resumes both in the eyes of recruiters as well as university professors that can provide funding for postgraduate studies. Some students are pursuing these projects as a standalone full time job since these are earning them more money than a regular full-time job.

It is wonderful to learn about such initiatives taken by students these days. These initiatives are providing livelihood to many families. In some cases, these projects are contributing significantly in earning foreign currency for the country. The only thing that these young minds lack is social support. Since most families are not well acquainted with these imminent sources of income, they fail to provide proper support. However, it is not putting a stop to their flow of work.

The purpose of writing this article is simply to state the obvious. In this fast paced world, no tradition will sustain for too long. If one should get accustomed to something, its unconventional thinking. For a city like Dhaka, unconventional seems to be the word for the survivor.