EVA Airways Corp (長榮航空) said first-quarter profit fell 14 percent because operating expenses and its tax bill rose.
Net income dropped to NT$406.6 million (US$11.6 million) or NT$0.17 a share, from NT$473.2 million, or NT$0.21 a share, a year ago, the airline said in a faxed statement. Sales rose 22 percent to NT$16.6 billion in the first quarter.
EVA and other Asian airlines incurred higher operating costs as the price of jet kerosene climbed to 6-month high early last mont in anticipation of the war in Iraq.
"It's a question of jet fuel prices more than anything else," said Timothy Ross, an analyst at UBS Warburg. "Everyone paid a lot more for their jet fuel in the first quarter,".
EVA's operating expenses rose 25 percent to NT$1.59 billion for the quarter.
Passenger revenue rose 15 percent to NT$8.33 billion in the first quarter, said Nieh Kuo-wei (聶國維), a company spokesman. Cargo revenue rose 33 percent to NT$7.19 billion, he said.
EVA paid tax of NT$1.76 million in the first quarter. It received a rebate of NT$71 million in the same period last year after it posted a loss of about NT$3 billion for all of 2001.
Asian carriers, including EVA and China Airlines Co (中華航空), may find it hard to boost earnings in the second quarter because of sagging ticket sales as the war in Iraq and severe acute respiratory syndrome (SARS) put people off traveling.
"SARS will definitely have an impact on our performance in the second quarter," Nieh said.
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