2019 Operational Highlights and 2020 Outlook

Teamwork Promotes Synergy


With air transport at the core, the China Airlines Group’s business extends to ground services, air transport assistance, aerospace technology, warehousing and logistics, tourism and leisure, and corporate holdings and leasing. In 2019, our subsidiaries all had excellent performances and continued to expand partnerships in their respective industries. Their contributions raise our overall competitiveness and enable us to offer a comprehensive set of aviation services.

 

Mandarin Airlines Continues to Strengthen Software and Hardware Services

China Airlines holds a 93.99% stake in Mandarin Airlines. Established in 1991, Mandarin Airlines currently has six Embraer-190 104-seat single-aisle jetliners and seven ATR72-600 70-seater turbo-prop aircraft. It leased 737-800s, A330-300s, 777-300ERs, A350-900s and other aircraft from China Airlines to fly regional routes in Asia and cross-strait routes. In 2020, it will add two more ATR72-600s to its fleet.

Mandarin Airlines is actively expanding domestic routes and increasing the scale of operations. In August 2019 it made travel between Taipei and Taitung easier by adding one more daily flight, bringing its total number of flights servicing this route to three a day. For international routes, it promoted tourism between Taiwan and Japan by adding chartered flights between Taichung and Tottori in September 2019 and between Hualien and Shimoji Island in November 2019.

Besides transporting passengers and cargo, Mandarin Airlines obtained a license to operate its own airport ground handling services, which raises overall service quality. With its operational base in Taichung, Mandarin Airlines is the only airline to have an aircraft maintenance station and offer air cargo warehousing services in the city. These facilities support comprehensive passenger/cargo transport and logistics services in central Taiwan.

Mandarin Airlines’ devotion to serving customers includes supporting the growth and education of disadvantaged children. For example, as part of its 28th anniversary celebrations the airlines hosted a charity fair in June 2019 in Minquan Park. Proceeds went to Hannah’s Hope Home to help abandoned babies in Taitung find a caring home. In conjunction with the charter flights to Shimoji Island in November 2019, the airlines offered an additional flight from Taichung to Hualien. To support dream journeys, Mandarin Airlines also arranged flights between Taichung and Hualien to support cultural exchange visits between students of Hualien’s Tafalong Elementary School and Nantou’s Chin-ai Music School. Mandarin Airlines cooperated with the Taichung City Government to promote the Flora Expo. Besides designing Flora Expo themed passenger cabins, Mandarin Airlines designed a series of Flora Expo products for in-flight sale. After the expo ended, it donated 5% of the proceeds from the products to the Leopard Cat Association of Taiwan to support conservation.

Mandarin Airlines is a member of IATA, maintains certification from both the IATA Operational Safety Audit and ISO 9001, and is a strong proponent of environmental protection. It passed British Standards Institution (BSI) certification, was the first airline in the world to obtain ISO 14067 certification, and became the first domestic airline to receive a carbon footprint label from Taiwan’s Environmental Protection Administration after calculating the carbon footprint of its Taipei – Kinmen route. These achievements demonstrate Mandarin Airlines’ advocacy of environmental protection.

Cooperative Partnerships Boost Tigerair Taiwan’s Award-Winning Service

In its sixth year of operation, Tigerair Taiwan, the China Airlines Group’s low-cost carrier, debuted its shares on Taipei’s Emerging Stock Board at NT$41 per share, making it the group’s first invested company to list on a local bourse. Tigerair Taiwan primarily targets young travelers, particularly independent travelers and students between the ages of 20 and 40. Its network focuses on providing diverse consumer choices within Asia. By December 2019, the airlines had accumulated passenger traffic of more than 9.5 million trips.

Calculated by average aircraft age, Tigerair Taiwan’s fleet of 11 A320s (all economy class with 180 seats) is one of the youngest in the Asia-Pacific region. Since its maiden flight in September 2014, Tigerair Taiwan has opened international routes to Macau, Tokyo Narita, Okinawa, Osaka, Nagoya, Busan, Incheon, and Palawan. It is the market leader with a 23% share of Taiwan’s low-cost carrier market.

In 2019, for the fourth time Tigerair Taiwan won a Reader’s Digest Trusted Brand Platinum Award. In the Asia’s Top Budget Airlines category of the Now Travel Asia Awards it was the only Asian international budget airline to receive a prize. It was also honored in the services category of a 2019 best places to work online poll conducted by 1111 Job Bank, and won a 2019 Chinese Public Welfare Golden Award Certificate. These honors show that Tigerair Taiwan’s social welfare contributions make it a model of corporate citizenship.

In the future, Tigerair Taiwan will continue to expand operations in its key routes as it follows a hybrid model of accommodating independent travelers and tour groups. Cooperation with travel agencies expands the products and packages Tigerair Taiwan offers, allowing passengers to benefit from a wider range of fast and convenient travel options.

Dynasty Aerotech’s Advanced Technical Skills Expand Its International Footprint

Dynasty Aerotech International, a fully owned subsidiary of China Airlines, was established in 1989 to carry out tasks such as aircraft cabin and exterior cleaning, aircraft spare part and accessory cleaning, air cargo container maintenance and repairs (pallet and cargo net), and airline catering trolley maintenance. To raise technical capabilities and service quality, in 2016 Dynasty Aerotech procured a French Ecoshine aircraft cleaning system and exclusive agent rights for Taiwan. Dynasty Aerotech also operates Taiwan’s only air cargo container maintenance center that is certified by the US Federal Aviation Administration and Taiwan’s CAA. To help expand this business, in 2018 the company changed its name to Dynasty Aerotech International, from the original Hwa Hsia Company, thus emphasizing efforts to become more international and technologically advanced. The hard work of the company’s employees was recognized at the end of 2019 when Dynasty Aerotech won an “invisible champion” award in the 1st Excellent Enterprise Awards in Taoyuan City, held by the Taoyuan Department of Economic Development. In the future, Dynasty Aerotech will continue raising maintenance capabilities and service quality to expand international business. New opportunities will come from better aviation ground services and air cargo container maintenance.

Taoyuan International Airport Services Becomes a Model for Offering Comprehensive Airport Ground Services

China Airlines holds a 49% stake in Taoyuan International Airport Services Co., Ltd. (TIAS), which was established in 1978 to provide comprehensive ground services to aircraft flying to and from Taoyuan International Airport. It is the largest ground services company in Taiwan, handling 65% of all flights at Taoyuan. In 2011, TIAS was accredited under the IATA Safety Audit for Ground Operations (ISAGO), which is considered the highest safety audit standard for ground operations. It completed reaccreditation in October 2019.

In 2016, in conjunction with a CAA initiative to promote safety management systems, TIAS completed a comprehensive overhaul of its ground services safety. As international efforts expand to build low carbon emitting, green airports, TIAS has acquired more electric-powered equipment, such as electric baggage tugs and shore power systems. Further advances are underway in information technology, including the introduction of digital management application systems to improve daily operations management. “Safety first” is the highest guiding principal of TIAS. By replacing old equipment, regularly training staff, and other measures, TIAS improves service quality and maintains its position as the Taiwan market leader. World-class standards ensure sustainable operations and make TIAS a trusted partner.

China Pacific Catering Services: A Leader in Flight Catering

China Airlines holds a 51% stake in China Pacific Catering Services (CPCS), which began operations in 1996 and is now Taiwan’s largest flight catering company. CPCS provides in-flight meals to 32 airlines as well as catering stores and delivery services. It is HACCP, ISO22000 and Halal certified. Bao Ding Catering Services, a subsidiary of CPCS, has also built an outstanding reputation for its catering, brick-and-mortar store operations, school cafeteria operations, employee canteens, bento box sales, souvenirs, moon cakes, Lunar New Year’s dinners, and food and beverage management.

Kaohsiung Airport Catering Services: A New Catering Services Star

Established in 1999, Kaohsiung Airport Catering Services (KACS) became a China Airlines subsidiary in 2018. KACS provides in-flight meals for flights at Taipei Songshan Airport, Taichung International Airport, and Kaohsiung International Airport, making it the only airport catering company to serve northern, central, and southern Taiwan. It also provides food and beverage catering service to airport VIP lounges at Taipei Songshan Airport and Taoyuan International Airport.

In addition, KACS makes food products for President Chain Store Corporation (7-ELEVEn) and lunch boxes for the Taiwan High Speed Rail. In 2019, KACS sought to expand the sale of its wide range of refrigerated and frozen instant meals to more partner shops and businesses. As KACS continues to demonstrate superb food and beverage making capacity and high-quality products, it has achieved excellent business results that make it one of the star performers of the China Airlines Group.

Novotel Taipei Taoyuan International Airport Creates an Exquisite Space for Rest and Relaxation

China Airlines holds a 100% stake in Novotel Taipei Taoyuan International Airport, which officially began operations in November 2009. China Airlines commissioned Accor S.A., a French multinational hospitality company that manages and franchises hotels, to operate the hotel under its Novotel brand. It is Taiwan’s only five-star airport tourism hotel.

Novotel Taoyuan has 516 guest rooms and a wide selection of eastern and western restaurants. It is conveniently located beside the airport, next to the Taoyuan Airport MRT’s Airport Hotel Station (A14a), and close to the Taoyuan High Speed Rail Station. Novotel’s global network of hotels is certified for environmental protection practices and continues to be a regional leader in sustainable development. In 2019, the hotel began renovations of its guest rooms in order to provide more comfortable, newer accommodation spaces and better leisure environments.

Taiwan Airport Service Co., Ltd.: A Professional, Certified Ground Services Company

China Airlines holds a 47.35% stake in Taiwan Airport Service Co. (TASCO). Established in 1966 as Taiwan’s first professional ground services company, TASCO provides aviation companies with safe, efficient, high-quality support. In 2017, in order to grow its portfolio of services, TASCO expanded its operations agent business to include Mandarin Airlines’ domestic routes out of Hualien, Mandarin Airlines’ domestic routes out of Kaohsiung, and Tigerair Taiwan’s international routes.

To improve ground service competitiveness, in 2014 TASCO applied to IATA for ISAGO HS certification. It became the first ground services company at Taipei Songshan Airport to be officially certified in 2015. TASCO also obtained ISAGO HS certification at Kaohsiung International Airport at the end of 2017 and completed recertification at Taipei Songshan Airport in 2019. Re-certification at Kaohsiung International Airport was underway. TASCO formally registered as an ISAGO Provider at both airports, making it the first ground services company to be dually certified. In the future, TASCO will continue to operate in accordance with international standards and will strengthen the contents of its organizational standards handbook. Improved airport apron services will provide customers with safer, higher-quality ground services.

High Praise for Taiwan Air Cargo Terminal’s Outstanding Service

Taiwan Air Cargo Terminal (TACT Logistics), which China Airlines holds a 54% stake in, began operations in 2000 as the only air cargo terminal company with distribution centers in both Taipei and Kaohsiung. TACT Logistics’ commitment to considerate, safe, efficient, and innovative service enables it to meet customers’ needs for professional import, export, transit, and express air cargo warehousing. This support is leveraged using TACT Logistics’ large operational area, diverse warehouse facilities, and quality workstation equipment systems. In 2019, TACT Logistics took advantage of its abundant experience to plan and manage a number of high-profile cases, including the export of high-tech aerospace satellite equipment (the FormoSat-7 satellite), a charter flight filled with smartphones, the import and export of precision equipment for a semiconductor manufacturer, and a charter flight to handle express package deliveries for the Singles' Day shopping spree.