Virgin Blue and Their Using the CHRM Model

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Table of Contents

Introduction
Step1: Screening HR oriented factors
Step2: Detecting potential HR opportunities and problems
Step 3: Verify/reject potential HR problems or opportunities
Step 4: Devise plan and success criteria
Step 5: Implementing the plan
Step 6: Evaluation phase
Conclusion
Recommendations
References

Introduction

Strategy in airline industry is based on two merits: one, the escalating worldwide concern for safety; and two, the increasing consumer demand for a variety of services. In such an environment, the HRM strategies are needed to drive promotional plans of airlines in order to be attractive in the aviation market.

Thus, HRM can be defined as an array of steps that converts strategies into action (Appelbaum & Fewster, 2005, p.70). This implies the process of how a firm recruits, interrelate, with, appraise and compensate workers to be more productive at workplace (Appelbaum & Fewster, 2005, p.70).

Richard Branson started the Virgin Blue brand in 1973. Since then, the airline has attained global status. In 1994, the airline acquired Euro Belgian Airlines and re-branded it as Virgin Express (Bamber, 2006, p.3).

Five years later, it was renamed Virgin Blue, an airline based on a low fare, low cost business model and flying in Australia. More than $7.4 million was spend as initial outlay to set up the Virgin Blue. The airline at first utilized reconditioned planes to implement its low fare, low cost (LCC) model (O’Sullivan, 2010, p.1).

There are several factors that contributed to the emergence of Virgin Blue. First, the market was controlled by Ansett and Qantas airlines. Second the demise of Ansett airline in 2001increased demand in the market and prompted Virgin Blue airline to increase its operations in Australia.

Third, Virgin Atlantic adopted a business model based on low costs. Based on this, the airline was able to capture over 30 percent of the market in three years time (Bamber, 2006, p.4).

Step1: Screening HR oriented factors

The Virgin Blue airline, in collaboration with other Virgin Blue Airlines Group offer domestic and international air travels to over 12 countries such as New Zealand, Australia, and South Africa. As the parent company, Virgin Blue Airline Group has a workforce of over 5900 workers.

The Virgin Blue Airline started a strategic plan set up a project portfolio management (PPM) to oversee its operations. This would be adopted to match a recently created project management methodology that the airline devised internally. After thorough studies were done, Bluenova was chosen among a list of optional providers to execute Daptive PPM.

The system has proved to be effective after one year of its use. The system was first applied to several Virgin Blue pilots in the organization to ascertain which components of the plan would be effective within the organization and the necessary modification needed.

The new system enabled the airline to modify its methodology and it captured employees’ opinion on what is needed before implementation phase of the program was done (Mason, 2009, p.1).

Environmental pollution is one among external problems the airline face. For instance, Virgin Blue Airlines produced over 1.5 million tonnes of carbon dioxide in 2006 (Godfrey, 2007, p.2). However, Virgin Blue is committed to reduce its carbon print.

For instance, it invested over $70 billion in low-carbon technologies and bio-fuels in a span of two years (Godfrey, 2007, p.4). Some of its other environmental strategies include: fuel management plans; carbon-offset program started in Australia; fuel and flight path efficiency; and Australian Greenhouse Challenge Plus program (Godfrey, 2007, p.6).

The airline is an apt example of an organization that has identified the need to adjust and be alert in a tricky economic environment and the firm is reaping benefits of Daptiv PPM. The firm has been able to create a bond with its workers to assist them develop their PPM potentials and achieve new heights of efficiency (Mason, 2009, p.2).

Virgin Blue is conscious of its environmental liabilities. The airline minimises food wastage on board collaborates with suppliers to evaluate apt packaging that reduces wastages. The airline frequently computes and submits data about its green house emission.

It has also launched Embrae E-jets that reduces emissions per passenger and facilitates course tailoring. Virgin Blue has also minimized on the use of secondary power units by utilizing proficient ground power units.

Moreover, Virgin Blue was the first airline to attain an all-inclusive and certified carbon offset program, which is an element of its assimilated strategy to deal with environmental issues such as carbon emissions (Green Credential, n.d., p.1).

Step2: Detecting potential HR opportunities and problems

The key element of an effective HR strategy lies with the supportive traditions and ideals that sustain it (Wooldridge, 2007, p.2). Virgin Blue’s case study demonstrates the importance of mitigating potential HR problems. The computer glitch at Virgin Blue’s check-in counters in Australia exposed several HR issues that most airlines encounter.

It has been noted that airlines are facades for a host of private firms that do carry out the low-key tasks such as cleaning toilets, loading bags and boarding tasks. A few airlines even rent aircrafts together with their own crew and pilot.

These airlines do not reveal incidences of outsourcing to their customers. However, most airlines, including Virgin Blue regard outsourcing as a cost cutting strategy.

For instance, Virgin Blue airline has outsourced some of its operations to Aero-Care, a firm that specializes in ground operations in Australia aviation. Virgin Blue has thus benefited from efficient ground services and lower cost arising from Aero-Care’s economies of scale.

The airline has also outsourced its IT services to Navitaire which manages computerized air ticketing, check-in and other vital Blue chip operations making it a low-cost carrier (Heasly, 2010, p.7).

Labour issues are of the factors that affect operations of Virgin Blue Airlines. Labour cannot be managed in a similar manner to other goods since dexterity and effort cannot be detached from the need of the holder.

For employers, production process can be arranged in several ways: hiring more workers; replacing labour with capital; increasing work rate; and restructuring division of labour.

The choice made is determined by strategies of the company, conditions in the industry and competition from rival firms (Boudreau, 2002, p.8).

Rather than perceiving labour selection as a convergence of the choices of independent agents in the framework of a required technological skill, it becomes a complex instance in a progressive association between firm-specific labour markets, internal and the external market where companies are entrenched and from which they converge their labour requirements (Weller, 2007, p.419).

Matters of control and power define the precise form of this coupling. Recruitment hurdles related with age, for instance, interact in a complex way with other stratifying features such as gender.

Given that age relations at workplace are instilled with matters of personal power that determine the relationship between employees and employers, they have the ability to upset hierarchical regimes of control (Walker, 2001, p.362).

Thus, companies have a prominent motivation to match age and authority in the pecking order. For example, the demise of Ansett airline left Virgin Blue and Qantas to service the Australian market.

Virgin Blue joined the business following the deregulation of the Australian market and commenced operations using an aggressive employment plan. Cost saving were attained through the stiffening rosters, annihilating work hierarchies and eliminating penalty wage rate.

Thus, the Virgin Blue’s workplace customs required that employees be granted more duties at an earlier phase. The function of senior manger is to aid junior workers rather than give instruction on what to do (Weller, 2007, p.419).

Step 3: Verify/reject potential HR problems or opportunities

Terrorism is a potential security threat to all airlines and Virgin Blue is not an exception. The airline has recorded several security mishaps involving on-board passengers. For example, in 2001 there were only two incidences. Passengers’ incidences later rose to over 100 the following year and increased to 130 in 2003.

One area that requires adequate security check involves screening of passenger cargo. The matter of check bag screening is very costly to many airlines. For example, the Virgin Blue airline projects that it will cost over $90 million dollars to conduct a comprehensive check bag screening procedure at Sydney airport.

Also, there is minimal collaboration between airlines and government agencies such as Department of Transport and Services. Ever since the terrorist 9/11 terrorist attacks in the United States, Virgin Blue has been under enormous pressure to elevate its security strategies, usually at high cost because there is always perceived risks when passenger enters the plane (David, 2003, p.28).

Moreover, industrial actions by labour unions threaten operations of Virgin Blue leading to massive cancellations of flights. Such an event is likely to generated substantial losses in terms of revenues and manpower. Gender and cultural diversity in the Australian aviation industry is another issue that Virgin Blue must address effectively (McArthur, 2010, p.13).

Step 4: Devise plan and success criteria

Virgin Blue is devoted to attaining workforce diversity by creating an environment that foster equal employment to prospective workers from all cultures. The airline is doing this via its Indigenous Employment Strategy that aims to deal with under representation of Torres Straits Islander and Aboriginal employee within its labour force.

The main goal is to ensure that the airline draws; build ups and preserve flexible, skilled and inspired indigenous workers. Virgin Blue has also collaborated with key organizations such as Australian Indigenous Mentoring center (AIME) and Australian Indigenous Leadership Center (AILC) to develop skills of young native Australians and eventually offer them employment opportunities.

To illustrate its commitment to this noble course, Virgin Blue Group of Airlines recently incorporated some native members in an array of roles including guest services and cabin crew (McArthur, 2010, p.13).

Virgin Blue airline has adopted other strategies to drive its success in the domestic and international operations. With regard to personnel management, the airline manages its labour expenses by constantly enhancing the efficiency of its labour force.

The reward scheme adopted by the airline is based on output and includes payments for on-board sales of goods for flight assistants and remuneration on the basis of sectors and amount of hours spent in air by pilots and the cabin team according to set standards.

In addition, the airline is collaborating with other stakeholders in several airports for aircraft and passenger management to reduce operating costs and provide efficient services.

Given the unpredictability in fuel prices and economic cycles, Virgin Blue tries to secure lucrative rates for these services by agreeing to multi-years deals at prices that are appended only to sporadic increases related to inflation. The establishment of Virgin Blue’s e-ticketing facilities and reservation centers has enabled the airline to get rid of travel agent costs (Virgin Blue, 2008, p.9).

The airline has also made safety regulation its primary focus area. This dedication is reflected by the firm’s recruitment policy with respect to training pilots, cabin crews and maintenance staff. Priority is also given to aircraft maintenance according to the utmost international aviation standards.

To demonstrate its commitment to safety, the airline has never recorded any event related to injury to cabin crew or passenger since its inception. Although the airline has adopted a low cost, low fare model to run its operation, the firm does not extend the strategy to areas such as quality assurance, training of pilots and fleet management (Virgin Blue, 2008, p.12).

Step 5: Implementing the plan

Virgin Blue airline recognizes environmental pollution as a vital problem that must be addressed appropriately. The airline supports the International Air Transport Association’s 2010 goal of reducing carbon emission by over 49%.

Over 97% of the airline’s carbon emissions are due to aircraft’s consumption. The firm’s Fuel and Emissions Management Team is focused on reducing carbon emissions through adoption of new technologies. Virgin Blue was the first airline to be certified by the government on airline carbon offset program in the world in 2007.

The airline’s-Fly Carbon Neutral- offset program has been operational in the last three years. The airline was able to offset over 3.9% of its carbon emission in 2008 (McArthur, 2010, p.11).

Virgin Blue is dedicated to developing a workforce that reflects diverse cultures within its employees. For example, the airline has an Indigenous Employment Strategy that aim to recruit Torres Straight Islanders and Aboriginal employees within its labour force.

To this end, Virgin Blue signed the Australian Employment Covenant (AEC), a nationwide strategy that intends to alleviate poverty and unemployment amongst native Australians.

The airline is also collaborating with Australian Indigenous Mentoring Experience (AIME) and Australian Indigenous Leadership Center (AILC) to help build working skills amongst young natives and then offer them employment opportunities within the airline.

For example, AIME, in collaboration with Virgin Atlantic, is currently training over 980 native high school students, spread over the East Coast of Australia (McArthur, 2010, p.13).

On security issue, Virgin Blue has taken measures to provide utmost level of security for its crew and passenger. The airline has collaborated with CASA and other government agencies to enhance safety of cockpit door.

Virgin Blue has introduced a shared responsibility program where passengers are encouraged to report incidences that may pose security threats to its business.

Given the high costs associated with screening passengers’ bags, it is crucial that government agencies and other stakeholders collaborate with Virgin Blue airline to meet these costs and augment security in all critical areas.

Thus, consultation among all stakeholders is the key to mitigating security threats facing Virgin Blue airline and aviation industry in general (David, 2003, p.28).

Step 6: Evaluation phase

An evaluation of the Virgin Blue’s CHRM model shows that it has successfully implemented its HR strategies. For example, the airline has managed its labour expenses by constantly enhancing the efficiency of its labour force (Malloy, 1996, p.32).

The airline has also out-sourced some of its auxiliary services to enhance service delivery at reduced cost. The employment strategies of the airline reflect has also been able to embrace diversity within its workforce by creating equal employment opportunities for its employees (McArthur, 2010, p.13).

Virgin Blue airline has also partnered with several government agencies and other stakeholders in efforts to enhance security of its operations (Virgin Blue, 2008, p.12).

Conclusion

Virgin Blue airlines Group has been able to successfully implement its HRM strategy to drive its operations and increase employee output. It selection, recruitment, training, evaluation and incentive programs have enabled the airline boast of a diverse workforce that is multi-talented.

Its decision to create job opportunities among the Australian natives through its partnership with AIME and AILC is a clear demonstration of its culture of diversity at workplace. The airline has also collaborated with government agencies and trained its staff to enhance security levels for its cabin crew and on-board passengers.

Recommendations

There are several strategies that Virgin Blue airline can adopt to enhance its HR management strategies and improve its business operations in the aviation industry. One, the airline should foster effective communication among its staff to facilitate efficient flow of information.

Second, the customs of the highest-performing airlines enhance internal marketing strategies, empower workers, and improve collaboration among workers. Third, senior managers should mingle freely with their junior staff and acknowledge their excellence performance.

Fourth, Virgin Blue should encourage its workforce to submit their recommendations on how to enhance service delivery. Fifth, the airline should offer refresher courses to its employees on a regular basis to keep them abreast with changing customer needs (Appelbaum & Fewster, 2005, p.75).

References

Appelbaum, SH & Fewster, BM. (2005). Human Resource Management Strategy in the Global Airline Industry. Concordia: Concordia University.

Bamber, G. (2009). Marketing Strategies and Labour-Market Behaviour of Full-Service and Low-Cost Airlines: An Australian Study. Brisbane: Griffith University.

Boudreau, JW. (2002). Strategic HRM Measurement in the 21st Century. Web.

David, P. (2003). Review of Aviation Industry in Australia. Web.

Godfrey, B. (2007). Climate Change Summit. Web.

Green Credential. (n.d). Virgin Blue. Web.

Heasly, A. (2010). The secret life of airlines. Web.

Malloy, A. (1996). Counting the intangible. Computerworld, 9, 32-33.

Mason, A. (2009). Virgin Blue Airlines enjoy unprecedented Visibility into its Project Portfolio through Daptiv PPM. Web.

McArthur, M. (2010). Virgin Blue Holdings Annual Report. Web.

O’Sullivan, P. (2010). Virgin’s New Look. Web.

Virgin Blue. (2008). The strategy of Low-Cost Carrier-Virgin Blue. Web.

Walker, G. (2001). Designing and implementing a HR Scorecard. Human Resource Management, 40, 365-377.

Weller, SA. (2007). The labour market prospect of older workers: What can legal case teach us? Work Employment and society, 21(3), 413-437.

Wooldridge, E. (2007). Breaking down the Barrier. Web.

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