China Airlines Ltd (CAL, 中華航空) yesterday announced that all employees would take pay cuts ranging from 15 to 25 percent from Friday next week to the end of July, the first airline in Taiwan implementing salary reductions to weather the COVID-19 crisis.
The China Airlines Employees’ Union approved the pay cuts following four-and-a-half hours of negotiations. The union asked CAL not to lay off staff and demanded that management take larger salary cuts than ordinary employees.
The two sides also reached an agreement on reducing employees’ working hours, which would vary based on rank, union president Liu Hui-tsung (劉惠宗) told the Taipei Times by telephone.
Photo: Tyrone Siu, Reuters
For vice presidents and senior management officials, their salaries would be cut by 25 percent during the three-month period, while managers or section chiefs would take a pay cut of 20 percent, the airline said in a statement.
Among CAL’s 12,272 employees, 481, or 4 percent, fit into the two groups, data showed.
The remaining employees, including non-management staff and entry-level employees, would take a 15 percent pay cut, it said.
With its monthly personnel costs totaling about NT$1.1 billion (US$36.6 million), the program is expected to save the carrier NT$150 million per month, Liu said.
Prior to the negotiations, CAL had proposed a reduction of more than 20 percent, or as high as 30 percent, Liu said.
“Employees can accept taking home less money than before, as the pandemic has hit the industry hard. Some of us have a lighter workload with less passengers, so it makes sense to cut our working hours,” Liu said.
However, management officials should take large pay cuts, which would be more helpful in easing the firm’s financial burden, he said.
As some departments, such as cargo, have not been affected much by the pandemic, they should continue working as normal and receive regular pay, he added.
CAL said it appreciates the cooperation of its employees and expects the salary cuts to help the company weather the crisis.
CAL’s passenger revenue fell 30 percent annually to NT$16.29 billion in the first quarter, as its passenger load sank 40 percent, while its cargo revenue gained 9.7 percent year-on-year due to higher demand, data showed.
EVA Airways Corp (長榮航空) said it has no intention of cutting employees’ salary, but has encouraged staff to take leave.
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