Liberty Times (LT): Some believe that the company should not have agreed to all seven demands made by its employees [last year], as it seemed to have fueled subsequent strikes. What are your thoughts on the matter?
Ho Nuan-hsuan (何煖軒): Such commentary reveals a misunderstanding of the airline industry. The industry is not a production line that can make up for the quota lost during a strike. It has its peak and off-peak periods.
If the strike in June [last year] was allowed to drag on until the peak travel period of July, August and September, the company would have collapsed from loss of profits, commercial compensation obligations and zero international credibility.
Photo: Tony Yao, Taipei Times
People with long-time involvement in labor movements organized that strike. They chose a key time to stage the protest — when President Tsai Ing-wen (蔡英文) was about to depart for her state visits to Panama and Paraguay.
Management erred in their judgement that there would be no strike and was thus unprepared. I was tapped to head CAL after the strike. My first priorities were to stop it from continuing and to ensure that the president’s flight took off on time.
The net result of giving in to the demands was a spike in operation costs. Despite keeping operation costs under NT$1.5 billion (US$49.9 million), CAL was still NT$160 million in the red last year.
Due to efforts to improve operational efficiency, the company made NT$2.6 billion in the second quarter alone — not only a historical record for the company, but also the first time the company overtook EVA Air in revenue.
LT: How did you turn the strike into a profitable scenario? What has led to your confidence to say that “there will not be another strike for the remainder of my term in office?”
Ho: Resolving the differences between the employees and employers was not difficult; only patience is needed to find the source of the problem, and wisdom to keep the big picture in mind.
Most importantly, we need to be profitable. To make that possible, we must not be afraid to offer employees more benefits and share profits with them.
Since the strike, I have made large-scale changes to the organization of CAL. Employees’ wages were raised — the starting salary is NT$80,000 per month for the cabin crew, while senior cabin crew could see their wages increase up to NT$110,000 or NT$120,000. That is a pretty good salary, even in the airline industry.
To show that CAL is not just a listed company that gives its management preferential treatment, I have also reassigned more than 20 managers.
Employees on all levels have their own responsibilities; base-line workers must handle and distribute their workloads and managers must be responsible — and severance should be considered — for performance downturns of their respective divisions or departments.
For employers, the management has to find methods of turning a profit. I have asked that all flight routes be subject to review. Flights that are not making money, especially red-eye flights, should be axed.
Conversely, we must also find new routes that are profitable. We should be expanding our cooperation with other international airlines instead of flying every line with CAL planes and staff, as it is highly inefficient.
The company should not buy planes at random; our current fleet of planes will have to suffice.
The company is also looking to diversify. This month, we will be building our own factory to manufacture aeronautic materials, and in the future, we will construct our own maintenance hangars. The company is also looking to expand into the online duty-free sector.
Combined, these efforts are estimated to bring in greater profits than if we remain a purely freight and passenger transportation company.
The first quarter saw the company dip NT$3.7 billion in the red. This is primarily due to the company finally settling old debts for plane purchases totaling NT$4 billion.
Judging by our revenue of NT$2.68 billion in the second quarter, I am confident in saying that the company’s future looks even brighter next year.
A public letter issued by the CAL Employee’s Union said: “Fully support the president and his new way of leadership. China Airlines for sustainable development” — that is where my confidence comes from.
LT: Other transportation businesses have seen rather hawkish unions after outside intervention. For example, Taiwan Railways Administration employees took mass leave during the Lunar New Year holiday and EVA Air employees took mass leave during a typhoon last month. How would you advise these companies to handle or ameliorate such situations?
Ho: I never intervene in union elections; whether they are hawks or doves, they are all employees. I would seek to understand the demands made by each faction, and my acceptance or rejection would be based on how reasonable the demands are.
If a non-employee member seeks to lead the negotiations, it is unreasonable. I have only agreed to have talks with CAL employees and no one outside of the company should even have a seat at the table.
The Labor Union Act (公會法) is vague when it comes to restrictions on unions that could represent employees in company negotiations. The act should have clearer definitions. An official union in the company should naturally head talks between the company and the union, as only such unions understand the characteristics of the company and would be able to negotiate the best deal for both the employees and the company.
Second is the matter of natural disaster leave. The company and the union had never discussed having typhoon days off. EVA Air made the mistake of creating loose regulations governing such days, resulting in more than 500 people taking their days off and paralyzing the company’s operations.
At CAL, only eight people took the days off. EVA Air might wish to consider modifying its regulations.
The Labor Standards Act (勞動基準法) does not have a special clause offering leave on typhoon days. Only the Act Governing the Suspension of Offices and Classes in Times of Natural Disasters (天然災害停止上班及上課作業辦法) mention typhoons, but it is only applicable to governmental organizations and schools. Airlines are private and should not be considered applicable.
LT: The public cannot accept employees going on strike and leaving their transportation rights hanging. Foreign nations have regulations dealing with such situations — what course of action would you suggest that would consider the rights of both employees and travelers?
Ho: Airline companies are franchised industries and shoulder the responsibility of public transportation.
In many nations, regulations are in place requiring that strikes held by transportation industries, hospitals or other vocations that would hamper the interests of the public must be stated in advance or must be limited in scope.
In the US or Japan, for example, intent to go on strike must be announced 10 days in advance. In South Korea, regulations state that even if strikes are ongoing, at least 80 percent of international flights and 50 percent of domestic flights must run.
In Taiwan, the Labor Standards Act is common law, while the Civil Aviation Act (民用航空法) is a special law and should be afforded greater status.
Aviation industries in Germany and Japan prioritize their equivalent of the Civil Aviation Act. The Taipei Airlines Association has also submitted an official request to the Civil Aeronautics Administration for the Civil Aviation Act to be amended with more appropriate regulations on handling disputes.
The Ministry of Transportation and Communications should also make a general review on transportation regulations to better handle disputes and ensure that even during strikes, a certain percentage of transportation services are running to protect the rights of travelers and maintain social stability.
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