Sat, Mar 21, 2015 - Page 13 News List

CAL to pay higher bonuses on bullish outlook for year

By Amy Su  /  Staff reporter

China Airlines Ltd (CAL, 中華航空) chairman Sun Hung-hsiang (孫洪祥) yesterday said the airline would distribute an additional month of salaries to employees, with the money to be wired directly to their bank accounts next month.

The airline also plans to raise pay by 2.5 percent on average this year, as it is upbeat about its passenger and cargo businesses, Sun said at a media gathering in Taipei.

The announcements came after thousands of its employees earlier this year criticized CAL for a plan to cut their annual bonuses to a flat level of NT$20,000 per person.

The workers’ rally in January outside the company’s offices drew the public’s attention to salary packages at the nation’s largest airline.

Sun yesterday said the company would strengthen its relationship with its employees. He did not elaborate on the issue and soon shifted focus to the declining global crude oil prices, which are likely to significantly ease CAL’s costs this year.

“We are quite optimistic about this year’s outlook, with high expectations on several fronts,” Sun said.

Sun said the global crude oil price might remain at about US$50 to US$60 per barrel for the next two years — a reasonable level in terms of fundamentals — which would benefit the airline industry.

The carrier’s passenger business should maintain steady growth this year with an increase of 10 percent in sales, as the nation’s inbound and outbound numbers continue to increase, Sun said.

Following the introduction of more Boeing 777 and Airbus 350 aircraft in the next few years, CAL’s fleet is set to be more fuel-efficient and that could improve the company’s costs and profitability in the long-term, Sun said.

In addition, improving prospects for the air cargo sector could lift CAL’s revenues further, he added.

CAL plans to recall three B747 cargo freighters to service gradually by the end of this year. The aircraft have been in storage in the US since 2012 — when cargo demand turned sluggish, Sun said.

Sun said the airline is aiming to achieve the earnings peak it hit in 2010, when it recorded revenues of NT$10.62 billion (US$336.63 million). Analysts said the company has a chance to see net income rebound to NT$10 billion this year.

Tigerair Taiwan (台灣虎航), a joint venture between CAL and Singapore’s Tiger Airways which launched in September last year, should also start generating income for CAL, with the number of its fleet set to triple from two to six by the end of this year, Sun said.

Eyeing the market potential of aircraft maintenance, CAL has established a new company — Taiwan Aircraft Maintenance and Engineering Co Ltd (臺灣飛機維修) — on Jan. 16, with the company scheduled to launch official operations in the third quarter of 2017, Sun said.

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