EVA Airlines (長榮航空), the nation's second largest carrier, is expected to see a NT$1.7 billion loss in sales this month after the government stopped issuing visas to visitors from areas listed as affected by severe acute respiratory syndrome (SARS), industry analysts said yesterday.
"With an estimated 30 percent drop in sales due to low occupancy on EVA's Hong Kong and US/European routes, the company may see sales fall NT$1.7 billion in April [over last month]," Peter Tseng (曾耀德), an aviation industry analyst at Polaris Securities Co (寶來證券) said yesterday.
Over the last six months, EVA's revenue averaged NT$5.8 billion per month, according to Tseng. Of that amount, 45 percent was generated from passenger flights, while the remaining 55 percent came from cargo services.
The airlines, already suffering from a fall-off in bookings on inter-continental routes, were hit further when the government announced on Sunday that it was suspending the issuance of visas to people from SARS-affected areas including China, Hong Kong, Singapore and Toronto. Arrivals from these areas are to be quaran-tined for 10-days.
The Hong Kong-Taiwan route has been a big money earner for EVA, accounting for 20 percent of the airline's total sales.
Yesterday EVA reportedly canceled four of its 12 daily flights on that route. Average occupancy on these planes was about 30 percent.
The company estimated sales in the second quarter of this year may drop 4 percent to NT$14.9 billion from NT$15.5 billion in the same period last year, according to company spokesman Nieh Kuo-wei (
"EVA is very likely to go in the red in the second quarter this year," said Neo Lee, an industry analyst at SinoPac Securities Corp (
The loss would be the first for the 14-year-old company in the last 15 months, he added.
Meanwhile, China Airlines Co (
China Airlines said yesterday that it expected to post an NT$1.1 billion sales loss in the second quarter of the year.
That's a 6 percent drop on average monthly sales of NT$6 billion per month, according to the airline's spokesman Roger Han (
China Airlines yesterday canceled up to five of its 15 daily flights on the Hong Kong-Taiwan route.
"We plan to keep the flight cancellations at around 20 percent this week," Han said.
He also claimed that the company's planes on the lucrative route are still 50 percent full as there are still many transit passengers.
Investors gobbled up both EVA and China Airlines shares yesterday on the Taiwan Stock Exchange.
"Many foreign investors consider airline prices to have nearly hit bottom and therefore now is a good time to buy," Tseng said.
EVA shares rose NT$0.65 or 6.8 percent near the daily limit to close at NT$10.1 yesterday.
Shares of China Airlines also jumped NT$0.65 or 5.8 percent to NT$11.75.
However, the surge was seen as a one-day phenomenon.
"The surge is short-term ... airline shares can hardly undergo a consistent and strong rebound unless SARS is under control in Asia," Lee said.
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