China Airlines to raise wages by 4%, give bonuses of 6 months salary

01/07/2022 04:57 PM
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CNA file photo
CNA file photo

Taipei, Jan. 7 (CNA) China Airlines (CAL), one of Taiwan's leading international carriers, has decided to raise salaries by 4 percent for 2022 and issue year-end bonuses equivalent to six months' wages, according to a company statement released Friday.

The salary hike comes after CAL ended the year comfortably in the black thanks in large part to booming demand for air cargo services.

Following negotiations between CAL's management and labor unions on Thursday, the carrier has also decided to hand out year-end bonuses to part-time workers as well.

According to CAL, the 4 percent wage hike keeps the company's wage structure in line with a government plan to raise wages for civil servants, teachers, and military personnel by the same percentage beginning Jan. 1.

Despite the global airline industry facing headwinds due to the COVID-19 pandemic -- with tightened border controls in many countries significantly curtailing the number of passenger flights -- CAL was one of the few international carriers in the world to post a profit last year after enjoying growing demand for cargo delivery services worldwide.

In the third quarter of last year, CAL posted NT$2.92 billion (US$106 million) in net profit, or NT$0.48 per share, compared with NT$708 million in net loss, or NT$0.13 per share, over the same period of the previous year.

The strong showing in the third quarter of 2021 allowed CAL to post a profit in the first nine months of last year. The carrier reported NT$1.56 billion in net profit, or NT$0.26 per share, compared with NT$2.02 billion in net losses, or NT$0.37 per share, in the previous year.

In the first 11 months of this year, CAL generated NT$121.94 billion in consolidated sales, up 15.99 percent from a year earlier.

Local media cited Liu Hui-tsung (劉惠宗), head of the CAL's labor union, as saying the company's employees had been delighted with the plan to raise wages and issue year-end bonuses as the company turned a profit.

According to the reports, the six months of wages as year-end bonuses will be the highest since the company was founded 62 years ago.

Liu was reported as stating that the wage hike and year-end bonus amounts were pending approval at a board meeting scheduled for next week.

Market analysts said CAL's generous year-end bonuses were a sign that the carrier would report strong earnings for the fourth quarter of last year.

In the wake of the impact on passenger traffic resulting from COVID-19, CAL began to focus on cargo services from March 2020, with the shift helping the carrier offset the fall in revenue from passenger flights.

For its part, rival EVA Airways announced earlier that it will issue year-end bonuses equivalent to 1.5 months of salaries on the back of a healthier bottom line.

In the first three quarters of last year, EVA Air posted NT$570 million in net losses, or NT$0.11 per share, compared with NT$3.64 billion in net losses, or NT$0.75 per share, over the same period of the previous year.

Evergreen Marine Corp., a fellow affiliate with EVA Air in the Evergreen Group conglomerate and the largest container cargo shipper in Taiwan, announced at the end of last month that it will dole out year-end bonuses equivalent to 40 months of salaries on average.

Riding the waves of rising freight rates on strong global demand, Evergreen Marine posted NT$158.28 billion in net profit in the first nine months of last year, up 1,347.32 percent from a year earlier with earnings per share at NT$30.27.

(By Tsai Peng-min and Frances Huang)

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