CHARM OFFENSIVE - Orient Aviation

carrier’s inflight training centreDespite the economic pall hanging overmuch of Asia as a result of the U.S. slowdown,she said the airline’s passenger revenue in thefirst half of this year increased by 18.5% overlast year. “I doubt if many airlines have that(figure) in today’s market.”However cargo revenue was down 6%.Even so she insisted that CAL would meet itsnet profit target of NT$3.26 billion (US$97.4million), up 11.3% from the NT$2.93 billionachieved in 2000.Ms Tsung was more upbeat than agloomier projection reportedly made by a CALvice-president, John Chang, who was quotedrecently as saying that it would be an uphillstruggle to reach the target.“So far we have not changed our forecast,”she said. “It will not be easy, but we areedging ahead.”On the cost front, CAL has instituted aspending freeze policy Ms Tsung summed upas: “Unless you tell me you have a reason tospend it, you don’t spend it.”She is determined to avoid sappingmorale by drastic reductions in CAL’s 9,400staff, seeing it as her social responsibility tocreate jobs in the airline’s many subsidiariesor freeze the jobs of retirees.“To me money is very cold stuff. Peopleare very warm, very productive.”But with the “cold stuff” much in mind,Ms Tsung has effectively utilised her extensivebackground in financial management,including 13 years as a city finance director insouthern California.She said she had “very aggressively”attacked unit and fuel costs, the latter byhedging, and had done “extremely well” onboth fronts.China Airlines: A positive and modern image under its new presidentShe had also exploited the depreciation ofcurrencies in recession-hit countries by switchingloans to those currencies. In addition,insurance costs decreased last year by NT$800million and a further reduction was expectedthis year, although she gave no details.She pointed to CAL’s improved safetyrecord – and superstitiously tapped the woodon her chair armrest as if to make sure that arecord of four major accidents in seven years,costing more than 460 lives, would not recur.The overall aviation climate may beinclement, but CAL is continuing to build itsfleet and network, Ms Tsung said. “I personallybelieve that when the market slows down,you should gain market share so that when itturns round, your leverage is much better.”Cargo destinations to Seattle and Nashvillehave recently been added, helping to moveCAL up from tenth to ninth place in worldairline rankings in terms of cargo tonnage.On the passenger side, a new route toFrankfurt, crossing Siberia, is due to be inauguratedon September 16, and Ms Tsung’slong-haul ambitions do not stop there. “Weare negotiating new routes in both Englandand France, and we are looking at other partsof Europe and the Middle East.” Ms Tsung isenthusiastic about a new TV advertising campaignshe had just reviewed which she saidwas aimed at being aired in all 22 countriesthat the airline reaches at present.CAL’s fleet size will reach 56 with thearrival of an Airbus A340 later this year, whenaverage fleet age will be six years.Airbus Industrie’s executive vice-presidentcustomer affairs and chief commercial officer,September 2001 | Orient Aviation | 29