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China Airlines threatens network cuts after pilot strike
February 22nd 2019
Management gives in to demands, raising labour costs. Global network trimming indicates China Airlines is once again without a core strategy. Read More »
Don’t let a good crisis go to waste. After giving in to pilot union demands in order to end a strike, China Airlines management threatened route cuts on four continents. Many of the flights would have been under-performing before considering increased cockpit costs. It suggests China Airlines once again lacks a core strategy, having failed to capture North America and being sub-scale in a brief Australia-Europe transit marketshare grab.
China Airlines is re-evaluating service to short- and long-haul destinations, according to local media. Within Asia, cut or reduced routes could be Bali, Delhi, Jakarta, Kuala Lumpur and Singapore. In Australia, Brisbane, Melbourne and Sydney could see adjustments. In North America, New York and Ontario could see changes while in Europe, London and Vienna may be adjusted.
Milan and Prague were mooted as new destinations, but may no longer be launched. Even a few adjustments would generate significant capacity for re-deployment at China Airlines, which has a relatively small long-haul footprint.
The route cut discussion is understood to partially be a negotiating tactic as management and the union are still discussing less-pressing demands. But many routes were likely to be adjusted, and the aftermath of the pilot strike provides a convenient excuse to a public sensitive about China Airlines.
China Airlines pilots went on strike during Lunar New Year. The airline maintained the bulk of its schedule, yet families not re-united or who saw delays angrily complained, and the pilots lost public support. In an unusual move, airline-union negotiations were publicly broadcast. The pilot union lost further support when the public saw their changing positions and perceived weak negotiation.
Some say neither side won, or at least no one emerged looking smart. China Airlines ultimately gave in to union demands, which EVA Air is understood to have agreed to in late 2018, avoiding a strike. A China Airlines cabin crew strike in 2016 ended with government intervention to agree to pay increases, which were then requested by China Airlines pilots.
The main point of contention this strike was pilot rostering on regional round-trips from Taipei, which account for the bulk of China Airlines’ flying. The pilot union wanted an extra pilot rostered on the basis of a generous duty time that included significant pre-flight, destination layover and post-flight work. Other Asian airlines are understood to have much shorter periods.
Local media report China Airlines’ unit labour costs were 3% higher than EVA but will now be 10% higher.
