Free Essay

China Airlines

In: Business and Management

Submitted By pascalbd
Words 6547
Pages 27
In Dec 2010, China airlines Ltd, announced that it had recorded sales revenues of 138.14 Million dollar as for flights carrying people. The company’s Sales Revenue increased by 41 % from Dec 2009 in which the company had achieved 98 Million Dollars. This increase was followed after the company’s announcement in January 2010 that its recorded Sales reached an amount of 358 Million dollars in Dec 2009 including civil and cargo services. These numbers show a huge deficit in the total revenue of flights carrying civilians where the main source of profitability was based and focused on Cargo flights services.
Still CAL, China airlines Ltd, didn’t complete its Mission well in terms of increasing profitability and developing its services in order to boost its revenues. Still Civil flights consider covering 38% of the company’s recorded sales. In our paper we stated the company’s Vision, Mission, and Objectives in order to state a plan for developing the company’s civil flights using an edited Business Model. CAL’s problem was in its high costs among competitors who used the LCC (low cost control) in their business in order to create a competitive advantage. In our paper we edited the company’s business model in which we entered some of LCC programs that may attract more customers and compete strongly with competitors. For that CAL developed its systems to be number one leading systems among other airlines especially those in emerging markets such as Mainland china. We stated in our paper the new e-ticketing system which ensures comfort and satisfaction to customers more than other airlines plus it did open its system for online booking by agencies for tourism purposes also. Note that CAL did face an increase in the international fuel costs which is a main source of increasing its flight costs. For that our paper stated that CAL should always buy new aircrafts with engines of less fuel consumptions and from there an idea of selling its old fleet come out since old airplanes usually consume more fuel than new ones.
In addition to its Business model, our paper discusses a main issue which faced CAL during the past 20 years which is “Safety and Security”. Many crashes and disasters were facing CAL Passenger airplanes in which about 20 crashes had occurred from 20 years ago (one accident each year). The reasons of such crashes were mainly from Airplanes’ maintenance and pilots’ mistakes. In the crafting strategy section in our paper we introduce some important strategies which CAL started implementing in the last 3 years. Some HR new policies were taking place in recruiting professional and experienced pilots instead of military ones. Maintenance teams were more exposed to the agreement of International Safety programs on monthly basis in which both Pilots and Maintenance teams were subject to exams on regular basis. CAL also was renovating its fleets in which it made several deals by buying new Boeing 777 aircrafts and sold its old ones. This strategy reduced critics that were pinpointing on CAL’s fleets ability to maintain Safety and Security to its passengers and increased some voices inside CAL who were the first who asked for the selling strategy for fuel costs purposes.
Our paper stressed on the importance of releasing the international restriction on Taiwan Island, the origin place of CAL, due to the conflict between Taiwan and Mainland China. This issue encourages the company’s mission in accomplishing its “Open door” policy to reach all regions in the world and especially places in Mainland China and places around Europe. This policy in CAL’s Mission obliged the company in the last three years to develop their competitive advantage strategy in order to compete strongly with international airlines, so we stated some of those strategies used and may be used by CAL in order to compete successfully.
We ended our paper with stating some future plans that CAL should implement in order to increase its Passenger’s Airlines profit and enhance some of its LCC strategies in its Business Model regarding its Cargo channels which had proven its success during the international Sanctions on Taiwan and CAL especially.

Company’s Background
CAL was founded in 1959 in Taiwan and it was considered to be the carrier of the Republic of China (ROC). The airline faced turbulence in its initial years of operations. Its poor safety record in 1990’s severely tarnished its brand image besides lowering passenger traffic. The airline’s mounting problems prompted it to look for ways to restore its image. Its initial efforts were focused on improving its brand image and regaining consumer confidence. The airline sought to pursue stringent safety norms, increase its maintenance facilities, and hire trained and experienced pilots. But these strategies were words only, since the relations between Taiwan and Mainland China were strained.
In 1971, CAL’s international operations suffered a major blow when the United Nations officially accepted the communist People’s Republic of China as Taiwan’s legal government and the airlines membership of the International Civil Aviation was revoked. Following the cancelation of the United Nations, the carrier lost its international contracts with Japan, Malaysia, and Korea. Its significant air route to Saigon was also lost after the collapse of South Vietnam government.
Also CAL faced an oil crisis in 1973 which affected badly its soaring profits. In 1974, CAL started a freight service to Los Angeles in view of the growing exports from Taiwan to America.
In 1980, CAL’s domestic operations suffered and for the first time it registered losses when the rail and road services network improved on the island.
In late 1980’s, CAL got permission to set flights to Mainland China due to a weak agreement done between Taiwan and Mainland china. This agreement remained strained due to the disagreements regarding the political status of Taiwan. This disagreement derived international countries to consider the government of Mainland china (PRC) a legitimate government and consider that in Taiwan (ROC) a restricted government.
In 1991, CAL entered into a joint venture with Koos Development Corporation to form Mandarin Airlines. This step came as a solution to escape from the diplomatic sanction on Taiwan. The joint venture enhanced the carriers of CAL to carry out cargo services over Canada and Australia where the carrier was banned from operating due to their diplomatic ties with PRC.
In the mid-1990s, CAL felt that the national flag of ROC in its symbol was controversial and so decided to change its logo. This action went into benefit to CAL in which its’ carriers gain landing rights in many European cities like Amsterdam, Rome, and Frankfurt.
However the Asian financial crisis of 1997-98 led to CAL incurring losses of 92.6 Million in 1998.
In 1992- both countries Taiwan and Mainland china agreed on the subject of “one China”. This agreement opened the door in-front of CAL to make travels through China. This agreement was matured enough in 2012 when Taiwan’s President Ma Ying-Jeou called for the signing of a peace agreement with China. For their part, Chinese leaders have also expressed interests in reaching such an agreement. Although substantial obstacles remain before any deal can be made, this increased interest on both sides of the Taiwan Strait suggests that a closer examination of an agreement’s possible dimensions is warranted.

Our Vision:
We (CAL) working in developing mobility, and making it an exciting experience for our customers. As an airport group we are the most strongly performing player in all business segments of the industry. We mainly work:
 To become the preferred leading air carrier with a global network of coverage thanks to its strict compliance with flight safety, reliability, product line, service quality and competitiveness. Also we are working in making zero accidents/crashes.

 To become an air carrier with;
• most envied service levels worldwide
• unit costs equating with low cost carriers
• sales and distribution costs below industry averages
• a personnel constantly developing their qualifications with the awareness of the close relationship between the benefits for the company and the added value that they contribute
• a staff well adapted to modern governance principles by observing the best interests of not only shareholders but also stakeholders

Our Mission

Grow a profitable airline with a passion for excellence, our customers and our people.
The company’s mission and strategic goals focus on giving the customers satisfaction and what they’d paid for. Also, the company is working on updating IT applications and software in order to ensure efficiency and consistency of its services. Moreover, we’re focusing on offering services in low prices in order to meet the demand of the customers for low fair flights. Thus, we also focus on the different external issues that are related to safety and security of the customers. And the main purposes we are working on are the Core Values.

Core Values

 Honesty and Fair Dealing
 Demonstrating Respect to Individuals
 Innovation
 Team Work
 Leadership
 Productivity
 Confidentiality
 “Open Door” Policy
 Increasing Customer Satisfaction: We will benefit from greater customer satisfaction when passengers continue to consider China airlines their choice in the future. For relaxed and contended passengers are basic requirements for fully utilizing china airlines fleet. So the consumer will feel secure during the safety trips.
 Value Creation: We are working to create sustained corporate value growth in all business segments. We generate above average financial returns in all our business segments. Therefore, we are among the top players in the industry in each segment. We strive to improve our financing capabilities and achieve a strong debt-service performance.

1. Main Goal is to make the number of airplane crashes zero; Knowing that the number of accidents were 9 during the past period 1993-2009.
2. Second goal is to make customer feel comfortable on flights on first, business and economy classes, by introducing ten Boeing 777-300ER passenger aircraft beginning in 2014.
3. Third goal is to create sustained corporate value growth in our business segments and generate above average financial returns in our business segments by increasing the net profit to reach NT $60 million by 2012.
4. Last goal is to reflect the positive image of the China airlines worldwide by joining SkyTeam Cargo on 2012.
CAL SWOT Analysis:
SWOT Analysis company profile is the essential source for top-level company data and information. It examines the company’s key business structure and operations, history and products, and provides summary analysis of its key revenue lines and strategy. It focuses on the strengths, weaknesses, opportunities for improvement and threats to the company.
China Airlines (CAL) continued its performance despite the difficulties it have faced due to several strengths listed below:
 It offers two major services: passenger transport and cargo transport.
 It operates flights to 98 cities in 29 countries.
 It used a strong management that helped the airlines reach its potentials by utilizing strengths and eliminating weaknesses
 The small size advantages that helped lowering the airline risks. The larger it gets, the more resources they have to pursue new markets and defend themselves against rivals so the small size advantages is an easily defendable qualitative factor, so competing institutions will have a difficult time overcoming it.
 The diversified geographic presence

China Airlines is operating across broad international and domestic markets competing with world leading giant airlines as well as local small operators. This lack of clarity on the strategic direction largely dilutes its capabilities and confuses its brand within markets. This has been reflected by lots of weaknesses that China Airlines inquired and put it in a hard situation to continue its performance and have a good stay in the market:

 Low profitability and utilization of capacity.
 Faulty pilot recruitment policies, lax maintenance systems, high costs operational structure, inefficient corporate culture added troubles to CAL.
 The strained political relations between mainland China and Taiwan prohibited the airline from launching flights to routes in China which made it worse for it
 CAL’s history of 50 years of operations was marred by several airlines disasters
 Hiring unqualified pilots
 Low standards of maintenance
 Airline crew was insufficiently trained to handle emergency situations
 Industry experts : poor safety record of the airline could be attributed to neglect of aircraft maintenance, bad hiring policies for captains and co-pilots , a lenient flight crew training process, and cost-cutting policies of the management , which sacrificed safety standards.
 Computer system problems
 Legal proceedings.
Each company has certain opportunities opening its way to continue its way along to face all what might stand in front of its improvement.
CAL’s opportunities:
 Accelerating air freight sector in Asia-Pacific
 Opening up of relations between mainland China and Taiwan
 Worldwide deregulations make the skies more accessible; the route agreement is easier to be achieved. The number of foreign visitors and investors to China is increasing rapidly.
 Complementary industry like tourism will increase demand for airline service.
 Customers are getting wealthier, tend to be less price conscious and prefer to choose quality service
 The online market offers the airlinesthe ability to greatly expand their business. China airlines can market to a much wider audience for relatively little expense
 Greater innovation can help China airlines to produce unique products and services that meet customer’s needs
 New technology helps China airlinesto better meet their customer’s needs with new and improved products and services. Technology also builds competitive barriers against rivals
 Emerging markets are fast growing regions of the world that enable China airlines to quickly expand
 New markets allow China airlines to expand their business and diversify their portfolio of products and services
 International markets offer China Airlines new opportunities to expand the business and increase sales
 China airlines faced imminent aggressive competition from world leading airlines and price wars triggered by domestic players.
 Foreign airlines will access the Chinese computerized seat ordering system, providing Chinese passengers with more choices.
 Trains and buses will dramatically improve speed and services in their medium/long distant routes, attracting passengers away from air service
 Strained political situation between Taiwan and mainland china
 LCC (Low Cost Carriers) that restricts CAL’s global expansion
 Competition from Taiwan based EVA Airways, an FSA which operated on domestic as well as international routes
 Global economic slowdown
 Fluctuating fuel prices.
 International competitors are numerous and difficult to combat, because they can have many competitive advantages that give them an advantage over China airlines

CAL’s Difficulties:
The case deals with the problems faced by China Airlines Ltd. (CAL). Much of its troubles were attributed to its poor safety record and history that severely tarnished its brand image besides lowering passenger traffic. In addition to this, analysts felt that faulty pilot recruitment policies, lenient flight crew training process, negligent maintenance systems, high cost operational structure, inefficient corporate culture, and the cost-cutting policies of the management which sacrificed safety standards added to its miseries. The strained political relations between mainland China and Taiwan which prohibited the airline from launching flights to routes in China only compounded its problems.

According to industry observers the airline’s poor reputation could be attributed to several reasons:
CAL recorded a history of 50 years of operations that were tarnished by several and frequent airline disasters, plane clashes, and significant safety events. Unfortunately the disaster record of almost 12 fatal events in its operations history had severely damaged the image of the carrier.
1. August 1970: CAL YS11 runs into bad weather minutes before landing in Taipei and hits a ridge 800 meters from the runway. Two of the five crew members and 12 of the 26 passengers were killed
2. November 1971: CAL Caravelle is bombed over the Formosa Strait. All the 17 passengers and 8 crew members were killed
3. February 1980: CAL 707-300 again runs into trouble before landing in Manila Airport in a “steep and de-stabilized approach” and touches the ground of the runway. Two engines and parts of a wing get damaged and two of the 122 passengers died.
4. February 1986: CAL 737-200 aborts landing in the Pescadores Islands, Taiwan, and in a failed go around attempt , killed all six passengers and seven crew members on board
5. October 1989: CAL 737-200 makes incorrect takeoff procedure near Hualien, Taiwan and hits clouds at 2130 meters in sky. All seven crew members and 49 passengers were killed
6. November 1993: CAL 747 touches down more than two-thirds of the way down the runway at Hong Kong’s old Kai Tak Airport and lands in water. All 396 aboard who suffered the ordeal were alive
7. April 1994: CAL A300-600 crashes because of the crew errors during approach to Nagoya, Japan. All 15 crew and 249 of the 264 passengers died
8. February 1998: CAL A300-600 crashes into a residential area in Taoyuan after landing before the runway during a second landing attempt in bad weather. All 15 crew and t82 passengers + 7 persons on the ground were dead.
9. August 1999: CAL MD11 drags a wing and crashes at Chek Lap Kok in Hong Kong when it tries to land in a typhoon. The aircraft stops upside down but catches fire. Luckily, only three of the 300 passengers were killed.
10. May 2002: CAL 747-200 splits up in a mid-air near the Penghu islands, Taiwan, after 20 minutes during a flight from Taipei to Hong Kong while the aircraft is just above 30,000 feet. No distress signal or other communication was received before the crash that killed all 19 crew members and 206 passengers.
11. May 2002: A CAL flight takes off from taxiway in Alaska and strikes an embankment on the way out which damages the landing gear. However, it manages to land safety later.
12. August20, 2007: CAL Flight 120, a Boeing 737-800 inbound from Taipei, catches fire after landing at Naha Airport in Okinawa Prefecture, Japan. After stopping on the tarmac, the engine catches fire, and the later explodes after all the passengers have been evacuated.
All this bad history of accidents and disasters was due to different mistakes that was done by the airlines which can be contributed to : Wrong management, hiring unqualified pilots, staff and engineers, disregarding Boeing instructions, neglecting pilot training issues, neglecting criticism and didn’t improve safety standards , low standards of maintenance , improper guidance for passengers , crew insufficiently trained for emergency cases, the carelessness regarding flight simulators and training times.

Hostile cross-strait relations between mainland China and Taiwan added to the airline’s troubles. China carriers had been prohibited from operating services to Taiwan and it was mandatory to all Taiwanese planes to land in the airspace of a third country before flying to Mainland china which wasted the time and money for both and it also increased the cost burdens for all Taiwanese carriers including CAL. These strained relations and the legal proceedings that the airline was obliged to follow put CAL in a hard situation since these relations stalled trade and commerce between the mainland China and Taiwan. Also the Taiwanese airlines suffered because tourists from mainland China were not allowed to travel to Taiwan individually but only in groups. Also cargo transshipment services were not allowed between these two countries. All these restraints prohibited CAL from the expansion not only in the cross-strait region but also on the international flight routes to Europe.

C. THE LOW COST THREAT: A low-cost carrier is an airline that offers generally low fares in exchange for eliminating many traditional passenger services. LCCs have been progressively increasing their market share on a global level. CAL carrier faced competition from both Taiwanese carriers as well as China’s aggressive government-owned budget airlines. These low cost carriers captured CAL’s regional market as well as a great proportion of its international market and had been responsible for restricting CAL’s global expansion as an LCC as well as putting the airline in a great competition with Taiwan-based EVA Airways.


 The impact of the September 11, 2001 terrorist attacks where America constituted CAL’s main operational market in relation to both cargo and passenger services.
 Rise in fuel costs
 Reduced passenger volumes due to the global economic slowdown

Actions to Survive
In order to restore its image and confidence in consumers, CAL adopted various steps in crafting its strategy. The company pursued a policy of retraining pilots and redesigning its safety procedures. As a first step toward improving flight safety, the airline pursued a policy of recruiting experienced pilots from international airlines and retraining its own pilots.
1. Simple Fleet
CAL tried to cut its costs by simplifying its fleet and reducing the kinds of aircraft it operated because by reducing the types of aircraft, they can improve their cost controls more than through training their pilots and maintenance crews.
Fleet renewal and aircraft type streamlining had always been one of the important cost-saving strategies of the airline. With this, CAL’s average fleet age increased from 5.6 years in 2007 to 6.2 years in 2008.

2. Continuing its Business Model
CAL had operated as an FSA since its inception and continued with this business model rather than going for an LCC model because they felt that the LCC model would not work out for it.
Moreover, its fares were already low and competitive so it was inadequate to further reduce its operational costs to increase demand and total revenues. Therefore to face the competition from other Taiwanese operators and LCCs of mainland China, CAL pursued a different set of strategies to control operational costs and garner profits.
In order to achieve this goal, it procured new aircraft, entered into alliances with important international airlines, introduced new routes, expanded cargo business, enhanced in-flight services and developed its maintenance and safety facilities.
At the same time, CAL planned to adopt some characteristics of LCCs to lower operational costs. This was done by introducing a series of e-services on its website and providing online booking, online individual and group check-in and online baggage tracking services to customers.

3. Revamping its HR Policies
Since the airline’s image had been degrading due to the culture prevailing in the organization, particularly among pilots, the carrier decided to go in for a revamp of its HR policies. As a first step, the airline brought about a change in management by removing managers at the top-level and hiring a woman chief executive. Also, the company decided to reduce hiring pilots with a military background and started employing pilots who had worked with renowned international airlines.
Moreover, the recruits had to undergo a strict process which ensured that the minimum qualification criteria of the pilots were met. This was done to curb the objections regarding the airlines’ safety record. CAL also started regular flight simulator tests once in three months, they included testing the pilot’s skill under emergency situations and to control nonscheduled raid situations. The company also took severe disciplinary action against pilots who failed to observe their rules. CAL also arranged for a training program to recruits in the US and Australia to help build their skills, language ability and discipline. From 2005, CAL started an online education system with the launch of the “Enterprise Information Portal System”; this system gave the employees the option of studying and improving their aptitude irrespective of time and space. Also, an annual “Safety Composition” contest was held for all employees where the winner was crowned Air Safety Model Worker. Their skills were also reviewed regularly during each flight, simulator examinations were held every six months and route examinations were taken annually to ensure the highest standards of piloting skills and enhance flight safety.
To cut costs, the airline also offered pension packages to employees willing to retire voluntarily.

4. Promotional Efforts
In 2005, CAL launched the Dynasty Package Program and introduced 140 travel tour packages covering 17 countries and 13 cities including popular foreign tourist places of the Taiwanese. Such a program increased Dynasty Package sales by 132% in 2005 and Dynasty tour sales by 55% in 2006. This was attributed to the introduction of an online system for Dynasty Packages.
Industry observers pointed out that the promotional efforts had helped to offset some of the effects of the negative image it had built in the minds of customers who were wary of flying CAL.

5. E-Ticketing
While CAL took steps to revive its image, it also focused on offering benefits to consumers that would attract them to the airline. It initiated an “Online ATM” with e-ticketing technology to reduce operational costs as well as provide consumers an easy payment option. A Taipei Warehousing Integration Operation System was also launched that provided warehouses, freight forwarders and airlines with a digital platform to exchange information, shorten procedures, increase cost efficiency and ensure better service quality customers.
A B2B2C system Axess was also started that connected the CAL computer reservation system to ticket agencies. Implementation of such an efficient and transparent system not only improved CAL’s image but also increased its sales potential.
Experts opined that such a move to improve e-ticketing procedures would bring down check-in times and reduce the chances of tickets getting lost. This would benefit passengers and at the same time lower operating costs for the company.

6. Other Initiatives
CAL introduced new uniforms for its employees that were fashionable yet traditional to reflect its corporate spirit and image. It also set up new operation headquarters, the “Taoyuan International Airport Airlines Operation Center”. This center included CAL’s corporate headquarters as well as a crew training and dispatch center and a four-star international brand hotel Novotel. This was the first time for China Airlines to build a corporate compound, opening a new chapter in company history. This relocation of its corporate premises will boost CAL’s corporate image and work efficiency and will help reduce costs.
In 2006, CAL joined Boeing’s cutting-edge Maintenance Plan and Boeing E-One control system to integrate airplane maintenance plans.
CAL also entered into code sharing agreements with reputed airlines. This not only extended CAL’s operating network but also improved its image and restored consumer confidence as it implied that these airlines had acknowledged CAL’s safety and service record. Moreover, the company unveiled its new corporate vision and added Team Spirit to one of its earlier four core values which were “Safety, Discipline, Innovation and Service”. CAL strived to become one of the world’s most trustworthy airlines through reorganization, innovation of corporate culture and improvements in maintenance. This included some personnel changes in the higher posts.
According to CAL, efficient management of aviation risks relating to flight operations, engineering and maintenance have become part of their corporate culture and will help us achieve our “Zero Accident” objective.

7. Improving cross-strait Relations
Under the presidency of Chen Shui-bian who supported Taiwan’s independence from China, no progress was made on improving economic ties against the background of political relations. Experts pointed out that though political relations had worsened, the economic rise in mainland China had had a greater impact on Taiwan than on any other country. They felt that the removal of cross-strait relations was also expected to reduce operational costs and increase the profits for both mainland China and Taiwan-based airlines. The opening of direct cross-strait routes helped CAL take advantage of the thriving aviation market in China by introducing daily passenger flights as well as cargo services.
Critics pointed out that even though routes had opened up to mainland China, CAL would face increased competition from both Taiwanese and mainland China carriers. However, CAL felt that it would be able to take advantage of the fact that foreign airlines could not operate on such routes as per government regulations and added that without that pressure valve, it would have been a disastrous environment for them but it’s not a solution for the Taiwanese carriers.

Crafting a Strategy to Limit the Problems and Meet the Objectives
After facing all the problems mentioned above related to safety, strained political relations and LCC threat, CAL adopted several corrective actions to overcome these problems and decrease their impacts on the company’s progress.
 Recording a history of bad performance and disastrous airline crashes made CAL take on steps to improve its safety image. These steps started by changing the HR policies through management adjustments and selection of pilots without military background. They also stressed on training their pilots, applying strict safety rules on them and scheduling regular examinations to test their performance. Following these steps, CAL was able to meet its objectives of making their customers satisfied and comfortable with the improved performance of the airline and the services provided to reflect a positive image worldwide.

 The strained political relations between mainland China and Taiwan stimulated CAL to arise attention to an opportunity hidden behind this fact that would remove these restrictions and give it a chance to expand regionally and internationally ensuring that this objective was met.

 Most of the regional airlines adopted the LCC model unlike CAL. This was a reason for losing CAL’s market share and preventing it from expanding globally. In order to overcome this situation, CAL continued with its business model while maintaining some characteristics of LCC to lower operational costs. To keep on the right track, it tried to cut costs by simplifying its fleet, reducing the kinds of aircrafts and initiating e-ticketing technology program. CAL also tried to remove the negative image built in the minds of customers by introducing promotional efforts. The process of reducing its costs helped CAL to create sustained corporate value growth, improve financing capabilities and ensure that its activities conform to economic and social criteria.

All companies are usually affected by some external factors that they can’t control. CAL is one of these companies that faced several problems from its external environment including high fuel prices, terrorist attacks and reduced passenger volumes due to economic slowdown.

Competitive Advantage
After all the modifications that CAL has applied to its best-cost provider strategy, it witnessed great changes in terms of safety, customer satisfaction, revenues …
CAL has implemented stricter controls on both foreign and domestic pilots and made a significant progress in regaining people's confidence and trust. All these revival efforts helped CAL to strongly compete with its rivals and gain more competitive advantages over them.
In 2005, CAL passed the "IATA Operational Safety Audit" showing that the airline's efforts to improve safety standards had helped it to achieve universal standards in flight safety. Moreover, in the Airline & Airport Customer Satisfaction Surveys conducted, CAL ranked the highest worldwide for its "First Class" service, second runner-up for "Economy Class" and the "Best Cabin Staff" for both Business and Economy Class.
In 2006, CAL's insurance fees were reduced by insurance companies by 45% reflecting the fact that the airline had been able to win back trust by its all-round efforts.
Moreover, with the easing of cross-strait relations, CAL's operational prospects improved considerably. This was attributed to the increased direct links with mainland China, lower fuel prices and the constant cost reduction strategies adopted by the airline.
All these factors attributed in CAL's success and attracted investors who remained optimistic. This was translated by a 15% increase in CAL shares during the period 2008-2009.
On the other hand, industry observers suggested that CAL could further simplify fare structures by charging lower fares from price-sensitive travelers and higher fares from business travelers. They also opined that the typical no-frill operating model of budget airlines may not work out for a traditional airline like CAL. They also stressed the fact that with the increase in passenger demand across Taiwan Straits, CAL should go in for both the hub-and-spoke networks and point-to-point services. This would help reduce operational costs and increase flight network.

Future Plan of CAL:
After the entire crisis CAL has faced, it stood strong and regained trust in the Airline business. To maintain the good location it had reached, the president of CAL said that the airline would never compromise of safety and would continue to offer the best service while maintaining low operating costs in future. CAL believed that revenues would be pushed in 2010 while it improves its business predictions based on the agreement done between Taipei and Tokyo in December 2009. This agreement states that Taipei and Tokyo would be able to operate four daily round-trip flights between Tokyo International Airport and Taipei Songshan Airport starting October 2010. Moreover, CAL also started a non-stop service between London and Taipei thrice a week in January 2010. Expecting the rising demand for passenger services in the future, CAL felt the need to expand its fleet and decided to lease one Airbus 330 jet in 2010. It also ordered 14 new planes that were expected to be delivered between 2015 and 2018. Among the plan was to add newer direct routes to mainland China and more mainland Chinese tourists were expected to Taiwan. CAL was optimistic about registering profits in 2010 as a result to all the measures takes regarding cost saving, network expansion, capacity regulation, and other financial improvement programs adopted in 2009. CAL’s president, Huang-Hsiang was confident about a very promising future for CAL not only in 2010, but also for the next five decades.
Comparing the plan and goals CAL had set to become more profitable and secure, the following were the actual results achieved during the time range between 2009 and 2013:

• 2009: o Launched Taipei-Osaka-Los Angeles cargo service, Taipei-Singapore route extended to Surabaya. Cross strait schedule service expanded up to 13 destinations. o Became a member of IATA's e-Freight program. o Launched Taiwan's largest 120,000-pound power plant testing platform. o Became the first airline in Taiwan to obtain the top-level "Reasonable Assurances Certification".
• 2010: o Initiated passenger routes from Taipei to Miyazaki, Qingdao and Songshan to Hongqiao, Haneda, from Kaohsiung to Xiamen, Narita and cargo services from Taipei to Xiamen, Nanjing, Fuzhou and charter flights to Xi'an. o Carried emergency relief goods to Haiti earthquake. o Signed a Memorandum of Cooperation with China Eastern Airlines. o Signed Strategic Cooperation Agreement, began codeshare cooperation with China Southern Airlines, began codeshare cooperation with Xiamen Airlines and signed Strategic Cooperation Framework Agreement with Fuzhou city. o Launched new CAL Park corporate headquarters at Taoyuan Airport. o Received the 'CG6005 Certificate of Corporate Governance' from the Taiwan Corporate Governance Association.

• 2011: o Signed Strategic Framework Agreement with Zhejiang Tourism Group. o Maintained air links with Japan, evacuated Taiwanese and delivered emergency relief supplies to Japan's quake region. o Received Reader's Digest'Asia Trusted Brands Survey Gold Award'. Named the Tenth Top-Performing Mainline Carrier by Aviation Week. o Launched Direct Flights From Taoyuan to Wuxi, Sanya, Yancheng, Haikou, Nanchang, Dailian and Kaohsiung to Beijing, Changsha, Chongqing, Kuala Lumpur, Taichung to Chongqing, Nanchang. o Became the first Taiwanese airline to join SkyTeam.

• 2012: o Introduced In-flight Meals Created by Michelin-star Chef and introduced SkyPriority to customers. o Signed Strategic Cooperation Agreement with Chunghwa Telecom. o Signed industry-academia agreements with NTUT, YunTech and NFU. o Signed OnPoint Fuel & Carbon Solutions Agreement with GE Aviation. o Received Authorized Economic Operator Certification. o Won Super Green Judges Award and First Prize for 2012 Green Brand. o Won Reader's Digest Asia Trusted Brand Survey Gold Award. o Received Sports Activists Award from Sports Affairs Council. o Claimed Top Mindshare in Management Magazine Consumer Brand Survey and received Maintenance Facility ISO 14001 Certification. o Launched Songshan to Wenzhou, Gimpo and Taoyuan to Kagoshima, Shizuoka, Toyama and extended Taipei-Sydney-Auckland. o Launched New Mobile Services and e-Commerce Services. o Launched the World's First Trans-Pacific Climate Observation Flight. o Became First Airline to Display Carbon Footprint and Calories for In-flight Delicacies.

• 2013: o Formed Greater China Connection Partnership with China Southern, China Eastern, and Xiamen Airlines. o Launched Taoyuan-Takamatsu flights. o Won Business Next Magazine's 2013 Green Brand Award and Super GreenJudges' Award. o ILFC delivered the first of three new Boeing 737-800 aircraft to China Airlines. o Launched Codeshare Service with Russia's Transaero Airlines and Hawaiian Airlines. o Launched Direct Flights from Taoyuan to Hawaii, Urumqi and Lijiang. o Named Top Aviation Brand in Manager Today 2013 Power Brands Survey. o Launched Regular Taoyuan-Ishigaki and Tainan-Hong Kong Flights. o 110 destinations in 29 countries and regions, as of September 30, 2013 as follows:
 Europe :Amsterdam, Frankfurt, Rome, London, Luxembourg, Manchester , Prague , Vienna
 Asia: Tokyo Narita, Tokyo Haneda, Fukuoka, Nagoya, Hiroshima, Okinawa, Miyazaki, Hong Kong , Macau, Bangkok, Jakarta, Kalibo, Denpasar, Surabaya, Hanoi, Ho Chi Minh City, Yongon, Kuala Lumpur, Penang, Singapore, Phnom Penh, Abu Dhabi, New Delhi , Manila, Seoul Incheon, Seoul Gimpo, Pusan, Chiang Mai, Osaka, Sapporo, Beijing, Shanghai Pudong, Shanghai Hongqiao, Guangzhou, Nanjing, Hangzhou, Shenzhen, Chengdu, Xian, Zhengzhou, Xiamen, Ningbo, Changsha, Shenyang, Qingdao, Wuhan, Wuxi, Sanya, Yancheng, Haikou, Chongqing Nanchang, Dalian, Wenzhou, Kagoshima, Shizuoka, Toyama, Takamatsu, Urumqi, Lijiang , Ishigaki.
 America:Anchorage, Honolulu, Los Angeles, New York, San Francisco, Chicago ,Dallas, Miami , Vancouver, Seattle , Houston, Atlanta , Boston ,Cincinnati , Salt Lake City , Orlando, Fort Lauderdale , Tampa, Hartford, Columbus, Raleigh/Durham, Jacksonville, Guatemala City, Minneapolis, Detroit, Las Vegas , San Diego , Phoenix, Sacramento, New Orleans
 Oceania: Sydney, Brisbane, Auckland, Guam, Palau
 Taiwan: Taipei Sung Shan, Taipei Taoyuan, Taichung, Tainan, Kaohsiung

The total number of employees has reached nowadays to 10,844; 8,969 of them are in Taiwan and 1,875 are overseas.

China Airlines and its subsidiaries hold the companies directly or indirectly and represent more than one half of the total number of voting shares or have a control over the management of personnel, financial or business operation of the companies. And they are distributed as follows:

Company Name Ratio of Ownership
CAL-Dynasty International, Inc. 100.00%
Dynasty Properties Co., Ltd. 100.00%
Dynasty Hotel of Hawaii, Inc. 100.00%
CAL-Asia Investment Inc. 100.00%
Yangtze River Express Airlines Co., Ltd. 25%
Hwa Hsia Company Ltd. 100.00%
Freighter Queen Ltd. 100.00%
Freighter Prince Ltd. 100.00%
Freighter Princess Ltd. 100.00%
Yestrip Co. Ltd. 100.00%
Cal Park Co. Ltd 100.00%
Cal Hotel Co. Ltd. 100.00%
Abacus Distribution Systems Taiwan Ltd. 93.93%
Mandarin Airlines, Ltd. 93.99%
China Pacific Laundry Services Ltd. 55.00%
Taiwan Air Cargo Terminal Ltd. 54.00%

Derek Sadubin, airline analyst, said about CAL “It’s a company that has come through years of external shocks and storms, probably shaken but still fighting”. This reflects the fact that CAL was always ready to take corrective actions in its strategy in order to face all the internal and external pressure. Even though CAL faced a lot of obstacles in its operations but is still fighting to overcome these problems and achieve better results in its business.
This was reflected by the facts presented in our report that show the progress of CAL through years and the modifications done that lead it to achieve its stated objectives. This assures the statement of Philip Wei, CAL’s Chairman, in July 2008, “We will do what we can to map out new operation strategies in order to increase the company’s business and fight for its continued survival.”

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