Problems at China Airlines
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Case Code: BSTR368 Case Length: 22 Pages Period: 2001-2010 Pub Date: 2010 Teaching Note: Not Available |
Price: Rs.300 Organization: China Airlines Ltd. Industry: Aviation Industry Countries: Taiwan Themes: Political environment, Regulatory environment, Operations |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
CAL's Difficulties
Industry observers felt that the airline's poor reputation could be attributed to its safety record. In addition to this, CAL's recruitment policies, corporate culture, and the strained political relations between mainland China and Taiwan were blamed for its troubles...
Revival Efforts
CAL adopted various steps over the years to revive its image after several fatal air disasters happened due to pilot errors and poor maintenance procedures. The company diligently pursued a policy of retraining pilots and redesigning its safety procedures...
Improving Cross-Strait Relations
From 1949, when the PRC government came to power, till 1979, relations between mainland China and Taiwan had remained practically frozen. Initiatives to relax the tension began from as early as 1979, but restrictive and non-cooperative political relations had mostly dampened the efforts to improve trade and transport between Taiwan and mainland China...
The Benefits
Analysts felt that CAL's revival efforts had started to pay off. CAL also felt that its focus on revamping HR polices had begun to reap benefits. In 2004, CAL reported that several people had shown an interest in taking up a career with the airline...
The Other View
Industry observers applauded CAL's efforts to revamp its image and reduce its operating costs. They, however, suggested that CAL could further simplify fare structures by charging lower fares from price-sensitive travelers and higher fares from business travelers...
Looking Ahead
On December 17, 2009, CAL celebrated its 50th anniversary. During the event, Wei said that CAL had managed to recover its costs despite the global economic slowdown. He added that the increase in revenues from cargo services and improved cross-strait relations had helped it maintain its position...
Exhibits
Exhibit I: Financial Highlights (2002-2008)
Exhibit II: CAL's International Routes
Exhibit III: Plane Crashes and Significant Safety Events of CAL
Exhibit IV: CAL's Dynasty Flyer Program
Exhibit V: CAL: Growth in Passenger and Cargo Revenue (2004-2008)
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