Sat, Nov 01, 2003 - Page 11 News List

China Airlines gains 43%


China Airlines Co (華航) posted a 43 percent gain in third-quarter profit as cargo shipments and passenger traffic revived after the SARS epidemic was contained.

Profit rose to NT$1.31 billion (US$39 million) from NT$919 million a year ago. Sales climbed 5.8 percent to NT$20.5 billion.

EVA Airways Corp (長榮) turned to a net loss of NT$743 million (US$22 million) in the first nine months.

In the year earlier, EVA Airways had net income of NT$2.07 billion. Sales in the period slid to NT$46.3 billion from NT$46.7 billion, it said in a statement filed to the Taiwan Stock Exchange.

China Airlines and other carriers are recovering after SARS kept people from traveling and led to a second-quarter loss of NT$1.36 billion loss at the company. The company's freight business, which comprises almost half of sales, grew 8 percent in the third quarter from overseas demand for the nation's semiconductors and notebook computers.

"Profit in the fourth quarter should be similar to that of the third quarter," said Karen Chan, an analyst at Credit Suisse First Boston in Hong Kong.

"The peak for passenger business occurs in the third quarter for China Airlines, while the peak for cargo business occurs in the fourth quarter," she said.

China Airlines may post profit of NT$1.2 billion in the fourth quarter, Chan said.

China Airlines shares slipped NT$0.1 to NT$15.20 on the TAIEX, after rising as much as 2 percent. EVA shares rose NT$0.2 to close at NT$14.4.

In the third quarter, passenger revenue picked up from the first half, said Joseph Wu (武志厚), a public relations specialist, without offering specific figures.

The carrier hedged fuel purchases and took advantage of lower interest rates to trim costs by about 4 percent in the first nine months from a year ago, he said.

Passenger sales in the fourth quarter, traditionally a low period for Taiwanese airlines, may rise from last year because of new service routes, Wu said.

China Airlines this month leased a Boeing 737-800 aircraft from unit Mandarin Airlines (華信) and leased an Airbus SAS 340-300 plane from Boeing.

The company also took delivery of two new Boeing 747-400 freighters in the third quarter and expects to get a third new cargo plane next month.

The new planes will help the carrier tap demand from recovering global economies.

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