Mon, Dec 14, 2009 page11

• At age 50, China Airlines faces a turbulent future

  HUMBLE ROOTS Taiwan’s flagship air carrier started out 50 years ago with just two World War II-era flying boats. It has gained a reputation for spectacular crashes

  • AFP
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  Taiwan-based China Airlines (華航), which marks its 50th birthday this week, can look back at half a century of turbulence, but the future could bring even more formidable challenges, analysts said.

  While in the past an abysmal safety record was the main problem, now the carrier faces completely different threats from China’s aggressive state-controlled airlines and the region’s nimble low-cost carriers.

  “It’s a company that has come through years of external shocks and storms probably shaken, but still fighting,” said Derek Sadubin, an analyst with the Center for Asia Pacific Aviation, a Sydney-based consultancy. “They’ve got the support of the Taiwan government ­behind them, which has given them a degree of confidence, but it’s an airline that really needs to step up a gear to face the challenges ahead.”

  

  A China Airlines plane taxis on the tarmac at Taiwan Taoyuan International Airport in Taoyuan on Friday.

  PHOTO: PATRICK LIN, AFP

  Starting out on Dec. 16, 1959 with just two World War II-era flying boats, China Airlines has grown into an international carrier with a fleet of 66 modern aircraft.

  What has also grown with the company, which is 54 percent owned by a state fund, is a record of spectacular crashes that have made it one of the riskiest carriers in Asia.

  Among the more recent, in May 2002 a Boeing 747 smashed into the Taiwan Straits, killing all 225 people on board. Five years later, a Boeing 737 burst into flames while landing in Okinawa, although without fatalities.

  A propensity for risk-taking among the carrier’s pilots, who for decades were recruited mainly from the island’s air force, has often been pinpointed as a liability.

  “Their staff are more like government employees than their counterparts in other companies,” said Bruce Tsao, a Taipei-based analyst with Capital Securities (群益證券). “It’s an old company with a government background. That mentality may be related to its safety track record.”

  The carrier’s reputation for poor safety has forced it to take a series of steps aimed at renewal “from inside out,” said Debbie Wu (吳宜蓁), a public relations expert at Fu-Jen Catholic University in Taipei.

  “This ranges from organizational reconstruction to buying new jets and designing new uniforms, and the consumers have noticed the changes,” she said. “The public is forgetful, and the airline has diverted attention from the negative news by creating new topics with these moves. It has successfully turned its image around.”

  But one thing has not changed: the company’s name, which dates from a time when Taiwan’s leaders, refugees from communist-controlled China, still claimed to represent all of the country.

  China Airlines may in fact be a more apt name now than it has been for a long time because of the enormous opportunities associated with the booming China market.

  A thaw in relations between China and Taiwan means the carrier now operates 55 weekly flights to 13 cities in China.

  While it faces competitors from both Taiwan and China, the China routes are a sure earner because of rules that exclude foreign airlines.

  “Basically, most players in this market are winners,” said Francis Hsiao (蕭義展), a Taipei-based analyst with Grand Cathay Securities (大華證券).
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