Reference no: EM133345584

Case Study: The South African Civil Aviation Authority (SACAA) has indefinitely suspended Kulula.com and British Airways flights in SA. Comair, which operates both Kulula.com and British Airways had hoped to resume flying again by midday on Sunday. It was a precautionary suspension following a review of certain policies, systems and procedures. SACAA said it undertook the review because of the recent spate of safety incidents at Comair. The SACAA wanted to confirm Comair's compliance with applicable Civil Aviation Regulations. So, Comair was to use those 24 hours to show that its risk and safety management systems were effective in managing potential hazards. As the 24-hour suspension drew close to an end, the Authority said it recognised Comair's efforts to resolve the matter as speedily as possible. But the Authority found that there are risks that Comair must attend to immediately. SACAA said after working through the night to review the evidence received from Comair, it raised three level 1 findings and one level 2 finding. A level 1 finding shows an immediate risk to safety and security, and it must be closed with immediate effect. Level 2 findings must be closed within 7 days. "The SACAA is fully committed to ensuring that the operator is back in the air and has dedicated a full team to assess and review the evidence as it gets submitted. The commitment to safety, in this case, supersedes any other need, and this is to ensure that South Africa maintains its safety record of having ZERO fatal airline accidents," said the regulator in a statement. Earlier on Sunday morning, Comair said it was planning to resume Kulula.com and British flights by midday. At the time, Comair was still engaging with the Civil Aviation Authority to lift the suspension. "We are doing everything possible to get the suspension lifted. We continue to engage constructively with the SACAA and are working hard to provide the CAA with the additional information it requires," said Comair CEO Glenn Orsmond at the time. Comair said it is unable to confirm when it will start flying again. "This is a huge blow to our customers, employees and the flying public as it effectively takes 40% of the capacity out of the market. The implications for the aviation sector and the country are considerable should the suspension continue for any length of time," said Orsmond. Orsmond added that Comair's priority now is to assist stranded passengers. He said the company will keep customers updated via SMS. "We have chartered two aircraft to assist vulnerable passengers and those who most urgently need to travel." In a statement issued by the SACAA, it said that the suspension follows an investigation into the "recent spate of safety incidents" at the operator. "This is a precautionary suspension for a period of 24 hours, within which the operator must demonstrate to the regulator that the risk and safety management systems are effective in managing potential hazards," SACAA said. In February, kulula.com forced a flight from Lanseria to Cape Town to divert to OR Tambo International over an engine-related problem, Fin24 previously reported. According to SACAA, Comair operations experienced several issues in the past month, such as engine failures, engine malfunction, and landing gear malfunctions. In an emailed response to questions from Fin24, Comair noted that three different flights were diverted for different reasons over the past three months. "We must however, put this in perspective, it is a very small percentage of all the flights we operate," Comair said. SACAA said its investigation sought to determine if Comair complies with Civil Aviation Regulations. The inspection also aimed to review Comair's quality control and safety management systems. Failure of Comair to produce "satisfactory evidence" to SACAA in relation to the findings of the investigation led to the precautionary suspension. SACAA said the precautionary suspension would allow Comair to demonstrate that its systems can "prevent and avert" safety hazards. The operator has until Sunday, 13 March, to meet the requirements. Failing that, the flights will continue to be grounded. Comair affirmed that it is engaging and working with the SACAA on an "urgent basis" to get the suspension lifted. Meanwhile, customers with booked flights for Saturday 12 March are advised not to travel to the airport. "We will advise affected customers soon on the options available to them," Comair said in a separate statement. "We are very sorry for the inconvenience this has caused our customers and are doing our utmost to restore operations as soon as possible." Source: https://www.news24.com/fin24/companies/updaye-kululacom-and-british-airways-operators-certificate-suspended- indefinitely-20220313

Question 1

According to the case study. The South African Civil Aviation Authority (SACAA) has indefinitely suspended Kulula.com and British Airways flights in South Africa. British Airways strongest competitor in the aviation industry is South African Airways. Making reference to the case study, examine why it is important for British Airways to strengthen their global operations and justify why it is imperative to understand the competitiveness of British Airways service environment to the IR customers? Use relevant examples to justify your proposition.

Question 2

In a volatile business environment, to increase the competency and add new competitive advantages, organisations rely on supplier relationship management. Having healthy relationships with the suppliers helps organisations to receive better service, ensure that service delivery is efficiently and effectively, and maintain a sustainable relationship over the long run. In context of the case study, provide a comparison of how COVID-19 would have impacted the service delivery and the inventory accounting system of Comair between Kulula and British Airways, both the perpetual and periodic system and discuss how the three costs associated with inventory would have affected the supply chain during the COVID-19 pandemic? Your answer must be supported with relevant examples.