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e x e c u t i v e i n t e r v i e wBrainwashing part of CAL’s safety blitz – page 34CAL: the‘Comeback Kid’After a year of ups and downs, China Airlines is back in the moneyBy Barry Grindrodin TaipeiResponsibility appears to rest easily onthe broad shoulders of China Airlines’(CAL) chief Sandy K. Y. Liu. It needs to.Historically, to be president of Taiwan’s nationalcarrier, with all the political baggage it carries,albeit through no fault of its own, has neverbeen easy.In more recent times demises like the Asianrecession and the tragic September earthquakein Taiwan, have tested CAL to the full.And if all that was not enough, a poorsafety record, very much the responsibility ofthe airline, has brought CAL extra governmental,operational and financial pressures.Mr Liu’s first year in office – he was confirmedas president in mid-1999 after fivemonths as acting president – has been nothingshort of extraordinary. A whole range of eventsfrom the good, the bad and downright uglyended in December when CAL announced itwas increasing its pre-tax profit forecast by39%.In August, CAL placed the largest aircraftorder in Taiwan’s aviation history and the biggestin the region for four years. Within 24 hoursit signed purchase agreements for 13 BoeingB747-400 freighters, valued at US$2.5 billion,with four options, and seven Airbus A340-300s with options for an additional A340 andfour A330-300s. The Airbus order was worthUS$1.8 billion.A few days later CAL’s safety record was inthe spotlight again, but for the worst reasonswhen one of its MD-11s flipped over on landingat Hong Kong’s Chek Lap Kok airport andcaught fire. Three people died and more than200 passengers and crew were injured.Although he was limited in what he couldsay about the accident at the time of thisinterview, Mr Liu said an ongoing investigationChina Airlines’ president Sandy K. Y. Liu: an extraordinary first year in officehas revealed, to his “relief”, that the cockpitcrew, contrary to early reports, acted properlyin the circumstances and pilot error was nota factor in the crash (see elsewhere in thisstory).The airline’s woes mounted in lateSeptember, however, when Taiwan was hit bya massive earthquake that killed an estimated2,000 people.Load factors slumped by 9% in October, butafter six weeks passenger and cargo traffic hadexceeded 1998 levels, with 73% and 85% loadfactors respectively in November!On September 30, CAL was forced to ceaseservices to the Philippines after Manila pulledthe plug on the air services agreement betweenthe two countries. The Philippines Governmentclaimed CAL and EVA Air were poaching sixthfreedom traffic on the route between Taiwanand its country and that they were hurtingPhilippine Airlines.Add these circumstances together and itmakes the profit forecast announcement bythe CAL board at the beginning of Decemberall the more remarkable.Consider the figures:Pre-tax profit forecast to increase to NT$2.8billion from NT$1.725 billion.In the first three quarters of the year passengerand cargo revenue rose 22.8% over thesame period in 1998. Pre-tax profit totalledNT$2.5 billion. This performance resulted in a6.2% reduction in unit cost, a 6.6% yield increaseand a 7.8% improvement in productivity.CAL predicts its revenue for 1999 willbe NT$61.2 bullion, up 18% on 1998. Net30 | Orient Aviation | February 2000