Sat, Feb 23, 2019 - Page 12 News List

Bonuses to raise CAL costs by NT$190m

SHARED FLIGHTS:China Airlines is ending its Taipei-Paris code-sharing agreement with Air France by the end of next month, because the route is not profitable

By Kao Shih-ching  /  Staff reporter

China Airlines Ltd (CAL, 中華航空) on Thursday said that its personnel costs would increase by an estimated NT$190 million per year after reaching an agreement on pilot bonuses.

Combined with an estimated cost increase of NT$114 million to dispatch more pilots, China Airlines said it expects its personnel costs to jump by NT$304 million annually.

In addition, the carrier is to spend NT$154 million to compensate passengers affected by the pilots’ strike earlier this month.

China Airlines would give passengers up to US$250 per person for food, accommodation and transportation, and would compensate travel agencies for inconvenience and losses due to the strike, spokesman Jason Liu (劉朝洋) told the Taipei Times by telephone.

As the carrier already lost NT$599 million in revenue due to the cancelation of 248 flights, total operational expenses due to the strike are estimated to hit NT$753 million, company data showed.

Meanwhile, China Airlines said it is to end its code-sharing agreement with Air France on flights between Taipei and Paris by the end of next month as business has not met expectations, Liu said.

The route was launched in April last year, with three code-share flights a week.

“Air France sells us seats on Taipei-Paris flights, and we sell the tickets to our customers. We make a profit based on the price difference between the two, but it was not good,” Liu said.

“We could not set the price too high for customers, so we tried to negotiate with Air France for a better price in a bid to boost our profits, but it was not successful,” Liu said.

Air France will continue the Taipei-Paris flights and sell tickets on its own, China Airlines said.

The Taiwanese carrier’s code-sharing agreement with Air France on other routes between European cities remain valid, it said.

Denying that the end of the Taipei-Paris code-sharing agreement had something to do with its huge losses due to the strike, China Airlines said the decision was made in January, before the strike.

“We do not operate the flights; neither do our pilots fly them, so the estimated increase in personnel costs has nothing to do with the Taipei-Paris route,” Liu said.

China Airlines reviews the profitability of all flights on a regular basis and adjusts them if needed, he added.

It said it hopes to operate a Taipei-Paris route alone in future when it has obtained proper approval.

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