Pilots Strike in China Eastern Airline

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HRM in Media
– Pilots Strike Case in China Eastern Airlines

Story Briefing:

On March 31, 2008, 14 flights of China Eastern Airlines Yunnan Branch turned back to Kunming without landing at their destinations. Passengers were told it was due to poor weather conditions. However, the weather did not affect flights from other airlines to the same destinations. The real reason was a strike by disgruntled pilots, according to the April 2 Guangzhou Daily. China's airline industry has been hit by a number of pilot protests in the last few weeks. On March 14, 40 Shanghai Airlines pilots took sick leave. On March 28, eleven pilots from Wuhan's East Star Airline requested sick leave. An April 1 emergency meeting of the Civil Aviation Administration of China (CAAC) blamed the strikes on a lack of qualified pilots and poor consultation procedures. CAAC said pilots who took strike action on March 31 would be severely punished, and strike leaders may face a lifetime employment ban.

Company background:
China Eastern Airlines Corporation Limited is one of the three major airlines in mainland China. It has a history dating back to the first Shanghai squadron of the PLA Air Force built up in 1957. In 1997, China Eastern became the first Chinese airline listed simultaneously in New York, Hong Kong and Shanghai stock market. The company operates 50 overseas offices and 11 domestic branches. Moreover, it holds controlling shares of over 24 subsidiaries including Shanghai Airlines, China Eastern Yunnan Airlines, China Cargo Airlines Co., Ltd and China United Airlines. China Eastern serves nearly 70 million travelers annually and ranks among the world’s top 5 airlines in terms of passenger transportation volume. Following the concept of “providing heart-to-heart service to our customers”, China Eastern strives to become an excellent aviation service integrator that is “cherished by staff, preferred by customers, satisfied by shareholders and trusted by society”. In the past three years, China Eastern gains more than 10 billion profits, which ranks among the top state-owned enterprises with respect to ROA and therefore been rewarded the “Golden Phoenix Award” by China Capital Market Annual Conference 2011. With the concept of “World-class hospitality with Eastern charm”, China Eastern will create splendid travel experiences for customers with an “accurate, delicate and precise” service quality.

Case Analysis:
1. Macroscopic view in how China Civil Aviation restructuring affect airlines staff When we look back and put whole case into the big platform, we can get the real insight and dig out the root cause about why pilot strike case happening in China Eastern Airlines and how China Civil Aviation restructuring affect airlines staff, especially for pilots in China stated own enterprises. 1) China SOEs Merger: Yunnan Airlines merged into China Eastern Airline In 2003, China Yunnan Airlines and China Northwest Airlines merged into China Eastern Airlines. All the airliners were transferred to China Eastern Airlines and now painted in parent company's livery. And Yunnan aviation market was the latest one to be opened for real market competition. China Yunnan Airlines was based in Kunming Wujiaba International Airport in Yunnan province and operated a fleet of Bombardier CRJ-200, Boeing 737-300 and Boeing 767-300 aircraft before the merger with China Eastern Airlines. China Yunnan Airlines operated mostly domestic flights from Kunming to major Chinese cities and also provided international services to Hong Kong, Singapore, Thailand and Laos. Before the merger, Yunnan Airlines was profitable, and Yunnan airline pilots income, was a leader in the industry. At that time, all the airlines, airports, civil aviation authority in eastern Yunnan Province were integral. That means, all the flights in Yunnan Province were conducted by Yunnan Airlines which brought the monopoly profits to the company. 2) Business Impact...
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