China Airlines profit surged last year as sector suffers slump

China Airlines Co (華航), Taiwan's largest airline, said profit rose almost three-quarters last year after a port shutdown in the US increased demand for its air cargo services.

Net income surged 72 percent to NT$3.1 billion (US$89 million) from NT$1.8 billion in 2001, the company said. China Airlines reported in January that sales last year climbed to NT$73.1 billion from NT$69.9 billion. The airline didn't give details of earnings from cargo and passenger services.

"The US port closure really helped our cargo flights' profit margin last year," said company spokesman Roger Han (韓梁中). "Profit margin was boosted as capacity utilization improved."

US West Coast ports shut down for 10 days in October last year.

China Airlines and other carriers may find it hard to sustain profit growth this year because of a deadly respiratory virus that's curbing travel demand and making people reluctant to shop for goods or eat at restaurants. That may also affect cargo volumes, analysts have said.

China Airlines shares fell 25 cents, or 2 percent, to NT$12.60 because of concerns severe respiratory syndrome, or SARS, may be spreading in China after Beijing reported 132 new cases today.

Separately, China Airlines has proposed offering chartered cargo flights to China that would stop enroute in Hong Kong, Han said. It must get permission from the Taiwan and Chinese government for such a service.

Han denied a local Chinese-language newspaper report saying the airline plans to offer direct cargo flights to China.

Taiwan bans airlines from flying direct to China.