China Eastern plots route through economic gloom
China Eastern Airlines has devised a plan, comprising 256 measures, to stem losses and guide the company through the global economic recession, Xinhua has reported. Luo Zhuping, China Eastern’s Board Secretary was reported saying that the efficiency-oriented policies include cutting salaries and urging employees to take unpaid leave.
“These new policies will be designed to control costs,” Luo said, adding that the pay cuts won’t reach low-level employees. Management teams will reportedly see a 10-30% salary reduction, depending on their posts.
Luo also said that some unprofitable flights (mostly international) will be closed down, although he did not specify which.
In its third-quarter report, the Shanghai-based airline posted a loss of CNY2.3 billion (US$342 million), with a 98.5% debt-to-equity ratio. Its passenger numbers fell 5.4 percent to 37.1 million throughout 2008. The figures make China Eastern the country’s worst performing airline, according to Xinhua. The carrier is thought to have lost CNY6.2 billion last year on its fuel hedging contracts, and has received a CNY3 billion bail-out from the Chinese government.
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