China Airlines Ltd (CAL, 中華航空) would end a salary reduction program next month and is not considering dismissing any staff, even though it is still not known whether demand for air travel will recover in the second half of this year, CAL chairman Hsieh Shih-chien (謝世謙) said yesterday.
State-run CAL in April announced that it would reduce salaries by 15 percent for employees, 20 percent for managers or section chiefs, and 25 percent for vice presidents and senior management in a move that was estimated to save NT$150 million (US$5.06 million) per month.
“We implemented the salary reduction [scheme] to avoid layoffs. So far, we have not considered any job cuts, as the situation is still manageable thanks to a boom in our cargo business,” Hsieh said at an annual general meeting in Taoyuan.
While most of CAL’s passenger aircraft have been idle due to flight cancelations caused by the COVID-19 pandemic and its monthly passenger revenue sank to NT$400 million from NT$10 billion a year earlier, the airline’s 18 cargo aircraft have become its pillar, generating enough revenue to sustain its business, Hsieh said.
CAL has also received more orders on higher freight rates since the outbreak began, he said.
CAL’s cargo revenue last month reached NT$9.12 billion, the highest for a single month, with cumulative cargo revenue growing 60 percent to NT$27.55 billion in the first five months of this year, company data showed.
“Salary cuts would end at the end of next month, according to our agreement with the labor union. Whether we will negotiate with the union again on pay cuts depends on the development of the pandemic,” Hsieh said.
“This is a tough year for airlines. Our main target is to survive. Demand for business travel would bounce back first, while it is still unknown when demand for regular travel would recover,” he said.
CAL is scheduled to receive one Boeing 777 freighter by the end of this year.
The airline plans to focus on gaining orders from local clients, and foreign clients in Southeast Asia and China, it said.
As the airline operates 10 Boeing 777-300ER passenger aircraft, it has trained some of its pilots to fly the wide-body jets and they are now ready to fly the cargo planes, it said.
CAL’s board of directors has not discussed renaming the airline, although some pro-independence groups earlier this month called on lawmakers to heed mainstream public opinion and review motions to rename it, Hsieh said.
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