China Airlines

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2. Taiwan improves relationships: With the easing of cross-strait relations CAL’s operations in cargo and passenger revenue could improve tremendously, CAL could also use more direct routes to Europe lowering flight times.

3. Quality & Image: If CAL was to improve its recruitment and safety standard then the Airline would be on track to recovering its image in the public eye, this would show the company is taking measures to ensure consumer safety as well as raising the standards of operations by the Airline.

4. Growing operations: With the implementation of new regulations and standards CAL has the opportunity to grow their network even further and capture more than just one 4th of the market share.

Threats

1. Economic Downturn / Increased Oil Prices: Economic downturn has weighed heavily on the number of passengers per month down to 150 flights, and also decreasing their cargo runs by 50 per month. One barrel of oil in 2009 was $90, with this being a continued trend could prove to choke any profits CAL hopes to make, with the added pressure of competing with low cost airlines.

2. Decline in cargo: China Airlines has been suffering from falling cargo demands and has sent 3 Boeing 747 to an aircraft boneyard for storage.

3. Increased competition from LCC’s: LCC airlines emerging in Taiwan are taking up the point to point market nationally of China Airlines, lowering their profit margin as they cannot compete on the same scale.

4. Collapse in Taiwan China Relations: Restrictions were partially lifted by MA Ying-jiu but there was no guarantee that the next government would follow the same policy.

Conclusion

This is what we believe the SWOT analysis of CAL would be like before any measures were taken to address weaknesses or seize opportunities in order to address threats. It becomes evident that CAL made use of the SWOT analysis and has since implemented a stringent policy of recruiting experienced pilots from international airlines which increases consumers trust. Meaning CAL made use of its opportunities to minimise its weaknesses and threats by improving the quality of service it provides by ensuring passenger safety and by repairing relations with mainland China to grow operations in passenger carrier operations as well as cargo. The airline now has a good reputation in both international and domestic markets, quality service and the number of loyal frequent flyers continues to increase rapidly. The company has been so successful at addressing its weaknesses and threats that it has announced that it will be launching a 'Next Generation Plan' to complement the delivery of its first Boeing 777. Designed to refresh the carrier's brand image, the carrier hopes to introduce unique product offerings that can showcase the beauty of the East and the cultural creativity of Taiwan. In the meantime our analysis suggests that CAL should look into their cost structure especially corporate structure design to find out the cause of such a high operational cost ra