Airline warns employees of contingency plans as viral panic causes financial avalanche

Taiwan’s national carrier China Airlines appealed to its 10,000 employees to be considerate and cooperative as the company faces an “economic avalanche” worse than SARS or the 2009 financial crisis.

China Airlines issued the statement in an open letter to employees yesterday, March 2, warning that if the company’s operating conditions continue to deteriorate due to the epidemic situation, further contingency plans will have to be made.

The airline announced that 49% of flights in March have been cancelled, after 23% of flights were cancelled in February, and furthermore, average passenger load on flights was less than 50%. The letter warned that even more flights could be cancelled if the epidemic situation continues.

China Airlines executives took a 10% cut in salaries last month as the headwinds of public panic began to affect the company’s revenue. Yesterday’s letter asked employees to consider taking voluntary special leave if possible, and to cooperate with contingency plans in order to allow the company to survive.

EVA Air, Taiwan’s second largest airline, made a similar appeal to employees several days ago.

The global panic over a virus originating in China branded COVID-19 by the World Health Organization has seen China Airlines’ market value wiped of almost NT$5 billion, while EVA Air has lost almost NT$10 billion in market value.

Minister for Transport and Communications Lin Chia-lung said today that in addition to subsidies for large airlines, including cuts in tax and landing fees other assistance packages are being put forward in the Executive Yuan. Lin made the remarks ahead of a meeting of the Legislative Yuan focused on a special budget to deal with the effects of the virus scare.

Last week, the government passed an NT$60 billion (US$1.96 billion) special budget, including NT$40.4 billion to help industries affected by the drop in visitor numbers. NT$19.6 billion was earmarked for “social assistance” and to boost the national health care system. NT$90 million will be spent to set up 30 new production lines for making surgical masks, bring the nation’s total to 60 production lines pumping out 10 million face masks per day.

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