Create Business Opportunities with New Ideas

Since the start of the pandemic, CAL has taken on the role of transporting pandemic prevention supplies such as masks, rapid test kits, and more than 120 million doses of COVID-19 vaccines between Europe, the Americas, Asia, and Oceania. Our commitment to providing high-quality transportation for medicine and outstanding services have not been hindered by the pandemic and we have worked hard with manufacturers of high-tech products and cargo distributors to ensure that all cargo shipments arrive at their destinations on time. CAL’s performance in the global cargo transportation market in the two previous years was spectacular. As the world shook under the impact of the pandemic, we made full use of our advantages with continuous cargo flights that ensured non-stop delivery and maintained the economic connection between Taiwan and the world. CAL began developing cold chain logistics for pharmaceuticals in 2013 and took the lead in launching containers with active temperature control in 2014. CAL became the first aviation company in Taiwan to obtain the IATA CEIV Pharma certification in 2019 and renewed the certification in 2022, which ensured high-quality and stable cold chain transportation services. CAL is a pioneer in Taiwan’s air cargo transportation market and has a wealth of experience in transporting precious antiquities, precision instruments, vehicles, large equipment, aviation materials, works of art, live animals, and other special goods.

CAL is the designated carrier for precision instruments and machinery for renowned major manufacturers in Taiwan and abroad. During the pandemic, CAL quickly shifted its focus to cargo operations and fully utilized the capacity of its cargo aircrafts and belly cargo capacity on passenger aircrafts to attain outstanding cargo transportation records in the past two years. CAL also received international awards such as the Air Cargo Excellence Award from Air Cargo World and Air Cargo Executive of the Year Award for its professional services. CAL recently introduced the next-generation 777F cargo aircrafts to create a fleet of 22 aircrafts with the existing 747-400F cargo aircrafts. CAL continues to expand cargo operations and now serves 36 destinations across the globe.

As countries reopen, passenger transportation volume gradually recovered in the fourth quarter of 2022. The IATA estimates that the number of passenger flights in 2023 will return to 66% of pre-pandemic levels in 2023 and will fully recover in 2025. CAL continues its fleet renewal with the replacement of 737-800 by A321neo and replacement of A330-300 by 787-9 to target business opportunities in the recovery of the aviation market and optimize the flight network. We shall create business opportunities with new ideas to respond to the gradual recovery of the passenger travel market and business requirements.

Sustainability Concepts and Implementation

CAL has always supported the United Nations Sustainable Development Goals (SDGs) and incorporated them into the Company’s core philosophy and sustainability strategies to actively promote ESG and sustainability actions. During the pandemic, CAL took on its role of transporting pandemic prevention supplies, emergency medical care supplies, and COVID-19 vaccines. We transported a total of 120 million doses of vaccines across the world. CAL also obtained the IATA CEIV Pharma certification, which demonstrated CAL’s capacity for high-quality transportation of pharmaceuticals. CAL’s sustainability performance improves each year and the Company received the highest rating in the 2022 Dow Jones Sustainability Indices (DJSI). CAL distinguished itself among the 57 aviation companies included in the evaluation and ranked first overall in the global aviation industry. According to the results of the DJSI evaluation, CAL received the highest score in the global aviation industry in environmental and social categories. CAL received the highest possible score for environmental reporting, social reporting, human capital development, corporate citizenship and charity, passenger safety, sustainable marketing, and brand awareness, and received the highest score in the aviation industry in 10 categories including the environmental policy and management systems, efficiency of business and ecology, climate strategy, food waste and general waste disposal. The scores showed that CAL has successfully integrated its business strategy with sustainability and showed the sustainability of Taiwan’s transportation industry to the world.

CAL has received wide acclaim in Taiwan and foreign countries for its long- term commitment to ESG and sustainability. In 2022, CAL received the “National Sustainable Development Award” from the Sustainable Development Committee of the Executive Yuan, the “National Enterprise Environmental Protection Award - Master Award” from the Environmental Protection Administration, and Silver Class in the S&P Global 2022 Sustainability Yearbook. CAL has also been selected consecutively as a constituent stock of the FTSE4Good Index Series and Taiwan ESG Index, and received recognition in the Global Corporate Sustainability Awards (GCSA) and Taiwan Corporate Sustainability Awards (TCSA). CAL pays close attention to climate change. We became Taiwan’s first airline to sign and adopt the Task Force on Climate-Related Financial Disclosures (TCFD) and we published the first TCFD independent report in the global aviation industry. CAL also signed the Science-Based Target initiative (SBTi) and plans to complete target setting in 2023.

In recent years, CAL accelerated the introduction of next-generation aircrafts that are more environmentally friendly such as 777-300ER, A350, A321neo, 777F, and 787-9, optimized flight operations and ground service efficiency, used sustainable aviation fuel, set up renewable energy, enhanced aircraft repairs and performance maintenance, reduced the weight of aircrafts, and developed electric vehicles. We expanded our ESG sustainability management to the Group and the supply chain, and focused on improving flight efficiency and reducing the overall carbon footprint of operations to attain the highest carbon efficiency in the Asia Pacific aviation industry and actively pursue the goal of net zero carbon emissions by 2050.

CAL Takes to the Sky Against All Difficulties

As the global pandemic subsides, CAL continues its fleet renewal to increase market competitiveness. In addition to the brand-new 777F cargo aircrafts, CAL added brand- new A321neo narrow-body passenger aircrafts and plans to purchase 16 Boeing 787- 9 passenger aircrafts to expedite business growth in the post-pandemic era. CAL provides services with a brand-new fleet and continues innovations to optimize the passenger experience such as upgrading the cabins of the 737-800 fleet to the first “in-flight wireless streaming video service” in the domestic aviation industry. Compared to narrow-body aircrafts of the previous generation, the A321neo fleet reduces fuel consumption by 15-20%, noise by 75%, and NOx emissions by 50%. It is also equipped with a cargo loading and unloading system, which increases cargo volume by 10-20%, free high-speed Wi-Fi text messaging, and upgraded cabin software and hardware services. When the eight new A321neo aircrafts were delivered to Taiwan, CAL made arrangements to use sustainable aviation fuels, as it did for A350 aircrafts to protect the environment. Sustainable aviation fuels reduce carbon emissions by 8% when compared with traditional fuel. CAL takes real actions to save fuel and reduce carbon emissions to support its commitment to net zero emissions by 2050, reduce greenhouse gas emissions, and protect the environment. CAL optimizes the expansion of routes to target the business opportunities in the economic recovery. We actively develop potential destinations in Southeast Asia and restore routes to Northeast Asia to satisfy citizens’ demand for travel. We also gradually restore long-haul flights and increase the revenue from the six freedoms of the air. CAL is ready to take to the sky against all difficulties in the post-pandemic era.

• 7^th time selected for DJSI Emerging Markets Index

  The only Taiwanese airline selected for DJSI Emerging Markets for six consecutive years and ranked in 1^st place among the world’s airlines.

• 7^th time selected for FTSE4Good Index Series

  Selected in the FTSE4Good Index Series for seven consecutive years.

• 3^rd Time in GCSA Award

  CAL won the Sustainability Reporting Award for the third time and won the Gold Award in 2021.

• Selected for the MSCI Index

  Selected as a constituent stock of the MSCI Global Standard Indexes in 2022.

• 4^th time in GCSA Award

  CAL won the Sustainability Reporting Award for the fourth time and won the Gold Award in 2022.

• 9^th time in TCSA Award

  CAL won the Taiwan Corporate Sustainability Award for the 9^th consecutive year and won the Sustainability Report - Best Report of the Year Award (Service Industry) for 2022.

• 4^th time selected for FTSE4Good TIP Taiwan ESG Index

  Selected in the FTSE4Good TIP Taiwan ESG Index for the fourth time.

• 6^th time selected for the Sustainability Yearbook

  CAL became the only airline company in Taiwan that was selected for the Sustainability Yearbook for the 6th time, won the Silver Award of the Sustainability Yearbook in 2022, and was ranked among the top 1% among aviation companies in the Sustainability Yearbook in 2023.

• Taiwan Ratings maintained “stable” outlook

  Despite the severe challenges to the industry during the pandemic, CAL demonstrated its resilience in operations in 2021 and the EBITDA remained positive, which was a stark contrast to the severe losses sustained by other international airline companies. In October 2022, Taiwan Ratings announced that CAL’s long-term and short-term credit ratings were “twBBB+/twA-2” and the outlook remained “stable”.

• 1^st National Sustainable Development Award

  Received the “Corporate Sustainable Development Award” in the first National Sustainable Development Awards organized by the Executive Yuan in 2022.