China Airlines Ltd (CAL, 中華航空) has become the latest airline to cut capacity as it battles rising fuel costs.
The nation’s largest air carrier said yesterday it would cut capacity by 10 percent beginning this month to reduce its losses, CAL spokesman Bruce Chen (陳鵬宇) said by telephone yesterday.
With the exception of European routes, 100 CAL passenger flights and 50 cargo flights per month will be cut, which would help the carrier save an estimated NT$200 million (US$6.6 million) a month.
CAL has also trimmed capital expenditure by 10 percent, he said.
The carrier was also reportedly looking into cutting salaries of its top management, administrative personnel and ground crews by 10 percent, as well as sending some of its staff on unpaid vacations to lessen its financial burden.
However, Chen said CAL had not reached a conclusion on salary reductions with its workers’ union.
“Cutting our employees’ salaries is only one of the many options that CAL is considering to help save costs amid high fuel costs. We have not finalized any such plans yet,” he said.
According to CAL, fuel costs account for nearly 50 percent of its operating costs, which have surged nearly 40 percent over the last 12 months. The company lost NT$2.9 billion in the first quarter of this year, following a loss of between NT$2.5 billion and NT$2.6 billion last year.
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