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JUNE 2021

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Taiwan’s “good pandemic” halo slips as COVID-19 cases surge

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June 1st 2021

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In the week leading up to the popular mid-June Dragon Boat festival, Taiwan’s president, Tsai Ing-wen, and her advisors asked citizens not to travel over the holiday period to help fight Taiwan’s first major outbreak of COVID-19. Read More »

It was a nationwide plea that Taiwan and its airlines considered unthinkable two months ago.

The process has demonstrated once again the vulnerability of airlines to factors beyond its control.

Three months ago, Taiwan was being lauded as a global champion in containment of COVID-19. But in a few short weeks that reputation turned to dust as Taiwan’s leaders were confronted with the biggest local outbreak of virus cases among its citizens since the pandemic’s global onset.

For almost four months of this year, the bottom lines of Taiwanese airlines were benefitting from ever-surging air freight demand. The sector was propelled by solid local economic growth that was creating a favorable environment for local airlines. All of them were confidently anticipating healthy peak season numbers.

As well, its hi-tech sector, which contributes approximately 14% to Taiwan’s GDP, was on fire from demand for its digital tech components and medical support products.

At the same time, according to industry sources, the race to meet global demand for its products, especially those in short supply, sowed the seeds of later problems for Taiwan’s airlines.

Shortly after quarantine requirements for the pilots were relaxed, with isolation shortened to five days and then three, a cluster of local cases of COVID-19 broke. It was connected to China Airlines pilots and the Novotel, near Taipei Taoyuan International Airport, a hotel popular with airline crew.

After the quarantine rules were relaxed, China Airlines (CAL) said: “China Airlines did not ask the Ministry of Health and Welfare or legislators to loosen the requirements of quarantine duration.”

In many countries, clusters of dozens of local infections might seem insignificant, but to Taiwan, which had prided itself on its zero COVID-19 record and a history of no local infections for months, it came as a shock.

Electronics industry accelerates vaccinations as COVID-19 spreads to science parks
Taiwan’s chip manufacturers, already battling a global shortage of their products, are racing to vaccinate hundreds of thousands of workers employed in the sector in Taiwan.
Some electronics companies already have forecast declined output of 35% for June because of expected outbreaks of COVID-19 among its staff. Many of them are closing their factories, on a rotating basis, for two days of disinfection, the Financial Times has reported.
Taiwan’s health department has set up huge temporary vaccination centres at several major science parks to reduce the risks of more cases of COVID-19 and production disruption in one of the world’s major semi-conductor manufacturing centres.

Additionally, the more contagious B.1.1.7. variant of the virus, commonly known as a “British variant”, spread to the community.

From Taiwan’s Central Epidemic Command Center (CECC) perspective, the disturbing aspect of the CAL/Novotel cluster was the inability to establish the chain of the infections, forcing it to accept the hypothesis that the source of the Novotel infections was foreign crew staying at the hotel. They were thought to have transmitted the virus to hotel employees and CAL crew.

In response, the CECC established new rules that required each airline to use different hotels for their crew layovers.

On May 10, with the CAL-Novotel cluster growing to 35 cases, including 13 pilots and a flight attendant, the CECC ordered all pilots, including returning crew from abroad, to complete 14 days of quarantine in Taiwan.

CAL said: “China Airlines plans to organize air crew into separate groups for rolling 14-day home quarantine. The airline is therefore not grounded and will continue flying with available crews.”

The CECC ordered pilots and cabin crew be divided into a “safe group” and a “risk group” depending on their quarantine status. CAL can roster risk group members to flight duties, but two group members are not allowed to work on the same flight and cannot mix. As well, members of the risk group are not allowed to see their families or visit public spaces.

Other restrictions that have affected Taiwan’s airline operations include a ruling from May 19 to the third week of June that is limiting entry into Taiwan to its citizens and foreign nationals holding residency. The new regulations also suspended transit traffic at Taipei Airport.

Similar border restrictions have been introduced in Taiwan during the course of the pandemic and for local industries it has become a grim routine. The new and unwelcome news for airlines was the limit on flights to the islands of Lienchiang (Matsu Islands), Penghu and Kinmen, the most popular travel destinations for Taiwanese last year. Island governments fear virus outbreaks could overwhelm their local health care systems following the sharp rise in COVID-19 cases since May.

A victim of the tightened travel and quarantine rules is the recently established Taiwan-Palau Air Travel Bubble. Although widely publicized and now officially postponed, it has not been popular with locals. Only 300 tourists have used the ATB since it was launched on April 1, mainly because of the high fares and the requirement that ATB tourists must travel with a tour group.

Despite the serious epidemic situation on the island, local airlines are maintaining operations but with air freight as a priority because of high demand in the sector.

China Airlines strategy blindsided by new quarantine rules
“All available manpower will be mobilized by China Airlines. Every effort will be made to ensure essential flights will continue to operate with crews available. Passenger and cargo flights are still in the process of adjustment,” the airline said.
“Priority will be given to cargo routes to ensure the continuity of industries. The short-term reduction in Taiwan’s import/export capacity will have an effect on cargo transportation times. The carrying of passengers will be cancelled on selected routes.”

China Airlines May 20, 2021

Taiwan’s second international carrier, EVA Airways, also is expanding cargo capacity.

“In response to the recent, localized outbreak of COVID-19, the Taiwan Central Epidemic Command Center halted transit services on May 19. We expect this policy to cause our passenger demand to drop significantly and continue to be sluggish until restrictions are lifted,” EVA said.

“At the same time, cargo demand is strong. We are expanding airfreight capacity as we place three new 777 freighters in service successively over the next six months,” EVA Airways Public Relations Division told Orient Aviation in a written statement.

Taiwan’s economy expanded 8.2% in the first quarter of this year, but this growth trajectory could easily change.

On May 15, with the growing number of local COVID-19 cases reaching a daily count in their hundreds, the CECC raised the epidemic alert levels for Taipei City and New Taipei City to Level 3, short of Level 4 that is complete lockdown. A few days later, Level 3, allowing indoor gatherings of no more than five people and outdoor congregations of no more of 10, dubbed a “soft lockdown” was introduced across the rest of Taiwan, bringing the island close to the dreaded possibility of a full lockdown. The feared situation would be a major blow to the airline’s intention to be the economy’s bloodline.

At June 8, Taiwan had recorded 11,694 cases and more than 260 deaths, a situation that prompted the warning against travel on the Dragon Boat weekend.

Efforts to curb the outbreak seem successful, but with the number of patients still growing every day, the best line of defense for the airline industry and the population at large is vaccination, a fact critics of CAL have pointed out.

“Until the current outbreak, only a bit more than 40 pilots at China Airlines were vaccinated. Compare this with its competitor, EVA Airways, where 200 of its pilots have received the vaccine. Had those [CAL] pilots been vaccinated, Taiwan might not be in this outbreak at all. Pilots and flight attendants are high-risk groups for Taiwan,” wrote Professor Chi Chunhuei, in a recent paper.

The Oregon State University academic has been closely studying Taiwan’s disease prevention mechanism since the Severe Acute Respiratory Syndrome (SARS) outbreak in 2003-2004.

His opinion was shared on Twitter by William Yang, an East Asia Correspondent and president of Taiwan Foreign Correspondents’ Club.

“The current CECC investigation into the COVID-19 infections of China Airlines crew has so far found no evidence the virus was brought into Taiwan by aircrews,” said a CAL statement dated June 1. The carrier also declared “crews are now being vaccinated based on their personal willingness and quarantine regulations. Vaccinations will be accelerated in line with the advice from the CECC”, it said.

Based on jab rates before the latest outbreak, it was predicted Taiwan would reach herd immunity in May next year.

The vaccination rollout rates increased by the outbreak means the program could be completed in October. The government is committed to Taiwan producing its own vaccine, with a production rollout forecast for the end of July. The U.S. is shipping millions of doses to the island.

According to the latest government’s plan, the completion depended on the availability of vaccinations.

This timeline offers great promise for the airline industry, but the rampaging outbreak of COVID-19 makes it clear that before this goal can be reached, Taiwan’s airlines face a nerve-wracking summer, especially if their air cargo lifeline suffers from reduced export production from Taiwan’s hi-tech industries.

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