Small Bribes

that Lead to Big

Losses
 Corruption is a serious problem in many
countries in the world. The world’s fastest
growing economy India has taken a series of
radical measures to mitigate adverse impacts of
corruption.
However, regulations do not actually
guarantee compliance. In fact, anti-corruption
laws are routinely broken all over the world with
impunity. According to many people, small bribes
are mere facilitation payments. They should not
really be called “bribes”.
Some countries like Australia and Canada
even allow their people to make these payments
legally.However, the payments have to be made
outside their country. It is incredibly hypocritical
and insensitive on behalf of these governments.
The Common Man’s Viewpoint
Common people do not see anything
wrong with bribing officials when it comes
to small offenses. For instance, traffic
offenses in many parts of the world are
almost exclusively settled via bribes. The
idea that a small grease payment is
somehow less harmful or sinister than the
big corporate payments is fundamentally
flawed. However, this flawed opinion is still
the opinion of the masses. Hence, it
influences the popular vote and is
somehow ascertained to be fair and
correct.
Bribes Become Extortion
Small bribes are often paid as facilitation
fees. However, if these bribes are paid too often,
they stop being facilitation fees. This means that
they are no longer willingly paid. Also, when one
party is facilitating faster work, the work of the
others automatically slows down. Since time is
money, most businesses will give in to the
extortion and later, in turn, will extort the money
from consumers.
In many countries, it is impossible to get any
task accomplished in any government office
unless bribes are paid off. This is coercion and
therefore must not have any existence in a
lawful society.
Slippery Slope
Small bribes are also a slippery slope. The
resources of the society as a whole are
squandered when bribes are received or paid
and resources granted, or fines waived off in lieu
of these bribes. Once the rationale that it is
acceptable to pay and take a bribe takes root,
amounts become immaterial. This is because
amounts are always subjective. Hence,
classifying bribes as big or small is futile. Such a
classification will not stop the bigger losses that
are faced by organizations.
Accounting Fraud
In most countries of the world, giving and taking
of any kind of bribes is illegal. However, we are
aware that most companies have to pay bribes to
get their work done in many countries, particularly
developing countries. Since multinationals are
operating in a wide variety of developing countries,
this amount adds up to a significant sum.
Depicting it anything other than a bribe is a
distortion of facts and hence can be called
accounting fraud. Accounting fraud is a serious
economic offence which leads to significant
penalties and jail time. However, common sense
dictates that companies that engage in bribery
would also have to indulge in accounting fraud to
cover up their tracks.
The Terrorism Angle
Money laundering is also an intricate part of
bribery. A lot of bribes are paid with laundered
money. Hence, the existence of a black market
is mainly due to corruption.Terrorist activities
also require funds which cannot be accounted
for or tracked. Hence, the same infrastructure
which was used for bribery can now be used to
cause violence and kill people. Bribery may look
quite harmless in the beginning In the absence
of these black markets, terrorists would find it
virtually impossible to execute their agendas.
Economics of Low Cost Airlines
 Airlines are a tough cut-throat business. A
large number of airlines across the world are
making losses, and others are barely profitable.
The business becomes even more challenging
when it comes to low-cost airlines.r. Only airlines
which are extremely efficient in their operations
can turn around a profit.
Big airline companies have failed to launch
successful budget airlines. It seems to be a
niche that only a handful of enterprises have
mastered. Although there are a few successful
low-cost airlines in Asia and America as well, for
the most part, Europe is their home. Ryan Air
and Easy Jet from Europe are the top low-cost
airlines in the world. They sell tickets for less
than 100 euros on almost all their flights and still
manage to make a decent profit.
Standardization
Standardization helps employees move faster
up the learning curve. With the passage of time, the
crew becomes increasingly efficient. Companies like
Ryan Air prefer to have their jets always in the air.
They do not halt at all for anything except cleaning
and servicing. Faster cleaning and servicing means
the jet stays in the air for longer and makes more
money for the company
These planes also tend to have the same type
of seats with minimum space. This allows the
airlines to sell maximum tickets. There are no
business class or first class seats available in low
cost airlines.
The extent of standardization is such that
budget airlines do not take connecting flights. This
is because connecting flights require a different
process for ticketing and baggage transfers.
Younger Fleet and Crew
The common perception about low-cost
airlines is that they use planes which are older
and outdated to lower costs. All major low-cost
carriers have younger fleets when compared to
full-service airlines. This is because younger
planes are technologically more advanced and
therefore offer better fuel efficiency and other
economic advantages.
The cabin staff of the low-cost airlines also
tends to be young and inexperienced. Budget
airlines often train complete newcomers to
perform the tasks. This allows them to employ
people for a fraction of the cost that other airlines
would. The staff is provided minimum safety
training, and within a few weeks, they are ready to
learn by experience while performing on the job.
Cheaper Airports
Budget airlines almost never fly out of the main
airports. Airports like Heathrow and Charles De Gaul in
Paris are expensive since they have a large number of
flights coming in each day. Instead, these airlines have
developed airports in nearby towns to these mega cities.
As a result, these airlines have tremendous bargaining
power over these airport authorities and personnel. They
negotiate the cheapest possible rates and pass on the
benefits to their consumers. Even if these airlines fly to
the main airports in bigger cities, they tend to fly at
unusual times. This allows them to minimize their costs
under all circumstances.
Automation

Low-cost airlines rely heavily on automation

to bring down the cost. They never provide
physical ticket printouts to their customer. In fact,
they charge the customers heavily in case such
printouts are required. Also, the check in almost
always done by machines. There is little to no
ground staff that these airlines employ. Similarly,
the baggage operations are simple and often
mostly mechanized with the need for fewer
workers. The rising minimum wage laws in
Europe make automation an extremely viable
option allowing airlines to heavily cut costs.
Economies of Scale
Budget airlines have to operate on a
large scale. A successful budget airline by
definition cannot run a smaller fleet. This is
because to gain the lowest cost from
suppliers, they need to have vast
operations. A small airline has little to no
bargaining power and is more likely to lose
money than to make some.
To sum it up, budget airlines have a
very different business model. This model
requires a high degree of efficiency and
precision to make money and cannot be
easily emulated.