China Airlines

Athlone Institute of Technology

Bachelor of Business (Honours)

Strategic Analysis

Year 4

Case study-China Airlines

SWOT Analysis

         | Student Number        | Student Name        | Signature (for hardcopy)        |

 1.        | Kaspars Keiris        | A00188908        |         |

 2.        | Bryan Lawlor        | A00189311        |         |

 3.        | Colman Nolan        | A00188114        |         |

 4.        | Kevin O’Toole        | A00180835        |         |

 5.        | Luan Yi        | A00190279        |         |

China Airlines Ltd. SWOT Analysis

SWOT Analysis examines the company’s, key business structure and operations, history and products and provides summary an analysis of its key revenue lines and strategy. China Airlines (CAL) is principally engaged in the provision of airline services. The company offers two major services, passenger transport and cargo transport. The company operates flights to 89 cities in 29 countries. It is headquartered in Taipei, Taiwan and employs more than 10.000 people. This report provides all the important information on China Airlines Ltd. and contains a study of the major internal and external factors affecting China Airlines Ltd. in the form of a SWOT analysis.

Strengths

1. Fleet age: The average age of their fleet was only 5.6 years, making it one of the youngest and most updated fleet in the world. Their products such as their aircrafts, services and flight networks are more superior to those of Chinese counterparts.

2. Joint Venture: CAL entered a joint venture with Koos Development Corporation to form Mandarin airline in 1991, so that the airline could carry out services to Canada and Australia where CAL itself was directly banned from operating.

3. Branding:  By rebranding the Airline with the Taiwanese flag and slogan “blossom everyday” CAL gained new entry to European countries like Amsterdam, Rome, Frankfurt and Vienne.

4. Aviation Market: In 2007 CAL captures one 4th of the aviation market in Taiwan making it the country’s biggest airline and national flag carrier.

Weaknesses

1. CAL is restricted: PRC government prohibits Taiwanese Airlines from operating in mainland China – both carrying passenger and cargo services – significantly limits the income source. But cross-strait relationship is improving significantly, and CAL has the confidence in competing with the carriers from mainland China.

2. High accident record: 12 major accidents (Plane Crashes and Significant Safety Events) have occurred during the year 1970 – 2007; Average fatal events per million flights for CAL is estimated at 6.44, worldwide average is 1.5.  This had severe impact on the passengers’ confidence in travelling with the airline – resulting in downturn in the revenues from carrying passengers.

3. Relatively high costs: Operating expenses are relatively high – greater than total cost, and grew significantly in the year 2008 compared to the year 2007.

4. High level of shares owned by government: Staff acted more like government employees than their counterparts in other companies; this may have had the effect on safety records as corporate democracy is hard to enforce.

Opportunities

1. Downsize: The Company has a poor record of safety due to cutbacks; by “trimming the fat” the company could make advancements at creating better quality and minimise operating expenses in order to maximise profits by focusing more on key areas such as repair & maintenance, freight logistics and aerospace technology.