China Airlines averts employee action

The employees union of China Airlines Ltd (華航) yesterday called off a planned protest after the carrier agreed to renew a collective agreement and improve flight attendants' working conditions.

"We decided to cancel the planned protest after the management made a positive and concrete response and signed a preliminary agreement on consensus items," Lee Cho-ping (李昭平), chairman of China Airlines Employees Union (華航公會), said in a phone interview.

Despite the cancelation, a small group of flight attendants gathered on their own outside company headquarters to demonstrate anyway.

The union originally gathered nearly 700 flight attendants who were on leave to take to the streets yesterday to demand that the carrier stop overworking them.

Prior to that threat, the union had reportedly negotiated with management on 84 occasions but still failed to reach an agreement. The employees' collective agreement expired last month.

Employees demanded a renewal of their collective agreement, a promise of no job or wage cuts if the company goes through with a planned share sale, and standard working hours and overtime pay for flight attendants.

Flight attendants were required to work without breaks that could last up to 24 hours per flight, the local channel USTV reported. Total flight hours could amount to 150 hours per month, higher than the 100 hours in international practice, the station reported.

Meanwhile, the union has also filed a lawsuit against the decision made last month by the government-funded China Aviation Development Foundation (航發會), the airline's largest shareholder with a 67-percent holding, to mortgage a 15-percent stake for NT$4.5 billion and use the money to invest in the cash-strapped Taiwan High-Speed Rail Corp (台灣高鐵), Lee said.

China Airlines said it accepted the employees' demand to sign a group agreement and to improve the working conditions of flight attendants.

"This will definitely increase our personnel costs," China Airlines spokesman Johnson Sun (孫鴻文) said. But he added that the impact on the company's finances would not be great. Sun declined to disclose the estimated size of the cost increase.

China Airlines' net profit for the first months of this year shrank to only NT$1.01 billion (US$30 million) from NT$3.39 billion a year ago. Weighed down by record high fuel prices, China Airlines in August cut its pre-tax income forecast for this year to NT$3.08 billion from a previous NT$4.4 billion prediction.

"So far, we have had no plan to again revise downward the financial forecast," Sun said.

Despite the big gap, the company will try to reach the target in the remaining two months of the year, in light of a traditionally high fourth quarter for cargo flights, higher revenues after an increase in the company's fuel surcharge, the government's approval to fly through Chinese airspace and robust business on popular routes to Japan, Hong Kong and Southeast Asian destinations, he said.