tris06

So these cost blow outs are due to fleet renewal? I am surprised they then are renovating the emerald/paragon lounge if costs are blowing out. The only way to reduce costs could be to close the lounge close to the gates.

But also, shouldnt these new aircraft be providing lower costs?

hayzel7773

Oil and labor are their main issues right now. Oil jumped from roughly $40 to roughly $60 a barrel last quarter and the high labor costs from the new FA agreement and the ensuing labor agreements have left CI with extremely high costs. Even the the chairman said so in his Q1 report, CI has to be conservative now because of high costs and decreased revenue.
Even if you have high costs, you still have to remain competitive with your product or face bowing the market to your competitors i.e. BR.

I also seriously hope that CI sorts out their labor issues. It has gone on for too long now and both sides need to find a solution instead of threatening to sue each other and vandalizing their own uniforms/egging the company hq.

tris06

Well now the agreements have been signed it is very important to stop any more increase from now on. Unions while being a force for paying fair wages can also ruin peoples jobs by demanding too much.

(Which may lead to strikes in the future if union demands are not met).

Its amazing the Taiwan government does not force other Taiwan airlines to the same standard if they think CI should pay this rate. I do believe that the government being the majority shareholder of the airline will need to take responsibility for this mess. The current president which I think overall is fine actually supported the staff striking when she should have not commented either way.

Anyway interesting times. Sadly just 60USD per barrel oil stuffed them up, though its back down around 45USD..

hayzel7773

Well according to the labor union, CI has not honored the agreement fully.
It is getting very serious right now, tensions are so high I fear they will have another strike. The union claims that both the govt and CI are clamping down on union members within the company and that they warned the union if they strike again, the company will be shut down. They are also mad that USA layover has been reduced from 48hrs to just above 24hours.
The Chairman and CEO sent a very threatening memo just 2 days ago after seeing the union splash red paint on their own uniforms. They have threatened to sue the union again for damaging their reputation by vandalizing the uniform and saying some things that affected people's perception on CIs safety.

tris06

Well I think CI should look at how the Qantas CEO dealt with the unions in Australia which most Australian's believe saved the airline as it was losing a tonne of money about 8 years ago with unions threatening to strike.

Qantas CEO shut down most of the airline using non union staff until it was sorted out. Now its profitable and its looking much better.

I think CI was caught with its pants down with the strike last summer as it never happened before in Taiwan. Now I am sure they have a plan in agreement with the government as ultimately the government will have to foot the bill for CI being unprofitable.

I just told my wife about the issues. We have 2 long haul trips already organised in business class this summer and autumn. It will be interesting if we get effected by this.

hayzel7773

CI announces LGW flights from 01DEC17.

http://www.routesonline.com/news/38/...from-dec-2017/

coolfish1103

It was all politics. The only reason why the strike was approved was because the mayor for Taoyuan was DPP and the chairman/CEO then were from previous government. An easy way to remove those people and then put your own people there. ...but it went all out of sorts cause those FAs and union leaders don't care if you are DPP or not, they claim big cause they can now strike legally.

Just do a JAL-esque bankruptcy and make CAL privatized so we don't need to see this going on.

bzcat

Labor rights in Taiwan is not respected by either political party so I think some of you are unnecessarily politicizing the CI situation. Note that the current DPP Govt just recently pushed thru the most labor-unfriendly overtime rules.

The reason CI staff was able to strike is because they belong to one of the few effectively organized independent union in Taiwan - The Taoyuan Flight Attendants Union 桃園市空服員職業工會 (TFAU). Labor unions in Taiwan historically have been affiliate organs of the KMT party-state machinery during martial law era to pacify workers and prevent them from organizing. Post martial law, labor laws in Taiwan are still very restrictive and favors the business establishment which both major parties support. In short, most unions in Taiwan do not represent workers interests like in western countries. They are relic of past authoritarianism in Taiwan and are generally employer sponsored and approved organization. In fact, the "official" CI union still exists (中華航空企業工會 or CIU) but it just parrots management's view like all other Govt affiliated unions in State-own enterprises.

TFAU was truly independent of the management and Govt and thus they weld an effective collective bargaining power. I think CI's employee by virtue of having more contact with unionized employees they encounter overseas, learned to organize much more effective than employees in other industries.

The main point of contention leading to the strike in 2016 was change that CI management made for "on duty time". Previously, cabin crew's on duty time started when they report to the CI bus in downtown Taipei. Now their on duty time starts when they reach TPE, which can take up to 2 hours and therefore reduced rest time between flights. To characterize this as some sort of DPP-KMT struggle is not accurate at all. DPP and KMT both supported the CIU, which actively undermined the TFAU. The only political party to public support TFAU last year was the liberal New Power Party.

The real struggle was between TFAU and CIU, and there is basically a case of generation gap. The younger employees at CI all belong to TFAU that wanted to collectively bargain, while CIU was controlled by the management which is generally older and unaccustomed to dealing with young people using social media to air their grievances. TFAU primarily organized via social media and sprung up after CI management made the changes to "on duty time" without consulting the cabin crews.

tris06

Bzcat I disagree, it seems you agree with them still expecting to start time when they arrive at downtown Taipei. So by the same thinking should everyone get paid time once they walk down the street in another city? Its your chioce where you live and you know when you applied in the last 20 years where most of your work will occur.

The reality is if work is in Taoyuan city then they should move to there if its too far away. Taoyuan airport has had the majority of the flights for well over 30 years now so why cant people think that this old old policy wont change?

Move to Taoyuan where actually it has far cheaper living and by the way I know quite alot of people live in Taoyuan city (Nankan district) where they work for BR and CI. That is about 20mins max away from Taoyuan airport.

I am all for supporting union valid demands but these seem excessive. Demand a 48hr break and at the same time greatly increase their time off pay while overseas? They might pull a 16hr shift to USA which 5/6hrs is probably a break anyway.

coolfish1103

I know what's going on.

I had even discussed this this time last year. There were two claims from the union that were not justified.

1. Clock in at Songshan and work at Taoyuan.

Had the airport never moved from Songshan this would never been an issue.

It did.

Is it really CAL's fault? I cannot say.

This has been a long 30+ years problem that CAL tried to resolve and it was successful with all other departments from pilots and everyone, but the FAs. The FA union wanted more.

2. $5 per diem instead of the $3 proposed by the management. Was $2.

Giving false information to the vast public on how the calculation is done.

Sure the management said yes to give you union $4 then $5, but they cut your hours down, set the turnaround time exactly as required by CAA to min 24, cut down all holiday flights by cancelling them or add extra frequencies, give you minimum crew required like EVA, give all the foreign based and non-union crew the long haul.

FA's would think what the union did won them everything, and the company or boss will not retaliate or have plan B?

They are wrong.

Sure you get more rest cause you are more expensive. Wasn't one of the seven claims had not enough rest time?

Sure you get less turnaround time so they pay you less on long haul. Now the union blame CAL for the 24 hour rule. Why don't you go F CAA about this when the rule is made by CAA?

You want another legal strike? Go ask Taoyuan mayor and see if he will let you have it this time now DPP people in place.

Just privatize CAL so we don't have to see this all the time.

Taoyuan Union FAs in CAL are one of the best paid in the Asia Pacific region given the hours you have to work and amount of taxes you actually have to pay due to per diem not paid in TWD. Still not enough? Sure, ask more. Just make sure the government does not subsidize and we won't care .....

hayzel7773

If you haven't noticed, the same union dare not be so brazen with BR. I wonder why.

The union knows they can push CAL, as a majority shareholder happens to be the govt.

Kevin Liu

CI potentially axes JFK route
http://www.taiwannews.com.tw/en/news/3202426

hayzel7773

Not surprised. CI is getting killed on the route.

tris06

That's a shame I was thinking about taking that flight next year with my grandmother. I wonder how BR is doing on this route then?
Would they be better off sending an A350 to NYC so that the capacity is reduced and so it might break even?

Quite amazing to think now that Australia will have more flight capacity than the total capacity flying into USA if NYC is cancelled

How to find out which routes are making a loss? Do they have half yearly reports on each route we can see?

hayzel7773

BR had difficulty with the daytime flights so they reduced to 11-12 weekly.
They don't have a route by route analysis but all this information is apparently from the shareholders meeting they had.
In the Chinese article, they said that the new interiors are heavy, which caused issues.