EU Alternatives Available Xiamen Airline the Contracts of The Pilots Case Study

?? Hello please write one alternative idea in section number4

Xiamen airline case

Introduction

This study case is about a Chinese commercial aviation company- Xiamen airline. In this case, Xiamen airline is reforming its compensation system especially toward the compensations of its pilots within the company. This process happened in 2009 and was initiated by Xiamen airline’s general manager. To understand why the general manager initiated this compensation system reforming, we need to understand the background of what is going on in the Chinese commercial aviation market during that period. According to the recent market records, the Chinese domestic aviation market has experienced a steady, rapid and consistent double digit growth rate in recent years, which is the highest in the sector globally. Due to the potential massive opportunities and demand in the commercial aviation market, many existing companies are rapidly expanding their fleet and trying to attract more pilots to work for them. The rapid growth of the market has led to a shortage of talented pilots in China. Many companies are trying to retain their talented pilots and also attract more for future development. Therefore, this movement also raised the turnover rate of the pilots in the Chinese commercial aviation market. Many pilots are looking forward to a higher compensated position and more benefits that an airline company could provide for their skills. Xiamen Airline, as one of the domestic airline companies in China, also experienced the market shortage and high turnover rate of pilots, has decided to reform its compensation system to retain and recruit talented pilots.

The general manager did a great job on reforming the compensation system. The reforms have the following basic change that makes their goal successful: First, 80-90% payment is based on variable pay. Second, the hourly pay rate is based on a pilot’s in-flight responsibilities. The more responsibilities occurred during the flight, the higher payment the pilot will receive.Third, the more hours flown, the higher the base pay the pilots will get. Fourth, pilots are compensated for the difficulty of the flight, more takeoffs, landings, geographic limits, delays, and weather could all be the elements that ultimately affect the final compensation. Fifth, now the pilots need to pay the penalties for not obeying SOP( standard operational procedures) regulations created by Xiamen Airline. Sixth, they provide more welfare to the pilots, these included life and health insurance plans, company retirement plans and unemployment insurance; annual paid vacation, housing allowances, assistance for relocating a pilot’s spouse’s job and flight ticket discounts for pilots’ family members; and the opportunity to purchase an apartment at a rate that was at least 40 per cent cheaper than the market price, expensive hotels. Seventh, now they have layered ranking, created higher ranking of pilots like honored/senior honored flight captain. Eighth, they have added annual safety performance bonus, company performance bonus and overtime. We really think that Xiamen Airline did a very great job on their compensation reforming, the record has also shown that the reforming worked and has made Xiamen Airline one of the greatest commercial airline companies in China. After studying the case, our team also would like to solve the problems for Xiamen Airline and help them to complete the compensation reforming. Our solutions might not be the best, we are trying to provide some alternatives toward the problems that Xiamen airline has faced.

3. Problem (One or two sentences developed from thesis Statement) – Present a clear statement of the major problem in the case in one or two sentences. Although there may be several problems, agree on one to solve in your case. Focus on solving the one main problem that you identify. Bring the facts and issues in the case current before you begin your case analysis.

“Retain and recruit pilots”

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Problem:

-Pilots strikes

-Unfair payments toward the pilots

-High turnover rate of pilots

-Shortage of talent pilots

-reluctant to coach new pilots, since they had to get qualified

-pilots were flying less hours, 50% of comp was fixed, 50% was variable

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There are many problems that Xiamen airline has to face, including pilots strikes, unfair payments toward the pilots, high turnover rate of pilots. Their previous compensation system the Xiamen Airline used to possess also has some stigmas. That makes some well-trained pilots are reluctant to coach new pilots, since they had to get qualified.The pilots were flying less hours, because 50% of compensation was fixed and 50% was variable, which means they do not need to spend that much time working. After all, the main problem that the Xiamen Airline faces is how to retain and recruit pilots, this will be the major problem we will be focused on. Compensation reforming is evitable and we will discuss some alternatives in the following paragraphs.

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?? 4. Alternatives Available (One of the longer sections of your Analysis) – Identify and analyze various alternatives (minimum of three) to solve the problem. In your analysis, describe some of the pros & cons of each alternative.

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“Cite the textbook in your alternative solution”

“Cite peer-reviewed sources”