Taiwan High Speed Rail Corp (THSRC, 台灣高鐵) yesterday said that it would reduce services and management salaries, while offering more ticket discounts, to weather the ongoing recession.
Beginning on March 16, THSRC will cut the number of trains by 126, or 13.4 percent, per week. Specifically, it will reduce the number of trains running from Monday through Thursday by 100, or 19.01 percent, and from Friday through Sunday by 26, or 6.2 percent.
To reduce operating costs, the company said that it would move its office from Taipei’s Xinyi District (信義) to Nangang District (南港), where the rent would be lower, and reduce the budget for each department by 20 percent.
THSRC chairwoman Nita Ing (殷琪) has not received a salary since Feb. 1, and starting on March 1, salaries for managers and above will be cut by between 10 percent and 20 percent, the company said in a statement.
The latest salary cut will affect around 110 THSRC executives, accounting for 3.2 percent of its total of 3,400 employees, it said.
“Amid the global economic recession, many companies have been forced to adopt cost-saving measures, and we will do the same or adopt similar measures to ride out the economic storm,” THSRC vice president and spokesman Ted Chia (賈先德) said yesterday.
“If economic conditions deteriorate further, we do not rule out streamlining our work force,” Chia said.
He declined to say how much the company could save by implementing these cost-saving measures. He also denied that the cost-cutting policy had to do with the company’s losses, saying it was a necessary move to help THSRC withstand falling passenger traffic.
Since launching in January 2007, THSRC’s trains had an average occupancy rate of around 45 percent. However, this has been falling since October, dropping below 40 percent this month, Chia said.
The average number of passengers per day also decreased to between 84,000 and 85,000 this month, from a peak of between 95,000 and 96,000 per day last August.
As a result, THSRC’s revenue fell to less than NT$2 billion (US$57.3 million) this month, from an average monthly revenue of between NT$2 billion and NT$2.2 billion, he said.
Meanwhile, the Bureau of High Speed Rail said yesterday it respected the decision of the THSRC to reduce executives’ salaries, but added that it would still have to evaluate the impact on passengers of the company’s proposed adjustment of daily services.
The bureau said it would work to ensure that the decision would affect neither service quality nor high-speed rail system safety.
ADDITIONAL REPORTING BY SHELLEY SHAN