Air Transport World

To clean up the chronicle.(China Airlines' recovery)

TAIWAN - China Airlines is unlikely to remember 1994 with a great deal of fondness, for a number of reasons, among them the infamous Qingdao incident, in which several dozen Taiwanese tourists visiting the mainland were murdered. This led the government in Taipei to impose a ban on such travel, which dealt a devastating blow to CI's Hong Kong traffic, since that city is the stepping-off point for mainland travel. The others: * An unusually high number of typhoons. * The major markets, such as Japan and the U.S., were under continued recession. * Uncertainty over the Hong Kong-Taiwan air-services agreement. * Rising costs. * Finally, the tragic crash of an A300-600R at Nagoya that killed 264 and called the airline's safety record into question.

All of these served to depress traffic and profits. Passenger enplanements declined from 6.2 million in 1993 to 5.9 million in 1994, while net profit fell from $115 million to only $17 million on revenue of $1.6 billion.

Thus, the fact that the airline has no great expansion plans perhaps is no surprise. Instead, it win concentrate on pursuing a few select opportunities, while tackling the problem that has dogged it in recent years, its safety record. …

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