China Airlines (
The airline will probably post net income of NT$756 million (US$22 million), compared with a loss of NT$1.36 billion a year earlier, according to the median estimate of five analysts surveyed by Bloomberg News. China Airlines is required to report its earnings by the end of the month.
Earnings at China Air and other Asian carriers such as Singapore Airlines Ltd slumped last year as the SARS outbreak, which infected 8,098 people worldwide, put people off flying in Asia. Since then, travel demand has recovered, prompting the Taipei-based airline to add flights.
"China Air's second-quarter earnings are much better than last year because of the return of traffic after SARS," said Karen Chan, an analyst at Credit Suisse First Boston, in Hong Kong. "More people are traveling."
Taipei-based China Airlines is also trying to rebuild its reputation after one of its planes broke up in midair over the Taiwan Strait en route to Hong Kong, killing all 225 people on board. The airline was allowed to add new passenger services after having no accidents for more than a year.
In June, it introduced passenger flights to Seattle and Houston from Taipei, as well as services to Hiroshima in western Japan.
Record high fuel prices are undermining airline earnings this year. Last week, Hong Kong's Cathay Pacific Airways Ltd, Asia's sixth-largest carrier, reported net income of HK$1.77 billion ($227 million), missing analysts' forecasts of HK$2.05 billion.
Its fuel bill for the period rose 43 percent.
Crude oil for September delivery reached US$45.75 last Thursday, the highest since futures began trading in New York in 1983. Jet fuel rose to a 14-year high of US$52.07 a barrel in Singapore on Aug. 6, according to oil-pricing service Platts.
China Airlines in March said it fixed 70 percent of its fuel costs for this year to help avoid losses from increased prices.
Last year, it hedged about 60 percent of its fuel needs.
Fuel costs, which typically make up about a quarter of the airline's total expenses, have risen to more than 30 percent, according to D.C. Wang, an analyst at Yuanta Core Pacific Capital Management (
China Airlines is getting a boost from Taiwan's economic recovery. The government said in May it expected gross domestic product to grow 6.77 percent in the second quarter, following a 6.28 percent expansion in the first quarter.
"People are traveling more overseas for leisure, to Europe, US and Asia," said Peter Tzeng, an analyst with Polaris Securities Co (
Tzeng estimated that China Airlines will fill an average 76 percent of seats this year, up from 69 percent in 2003.
Second-quarter sales rose 59 percent from a year ago to NT$22.2 billion, the company said earlier.
China Airlines Chairman Chiang Yao-chung (
Increased sales in its cargo business also contributed to the company's strong earnings.
Tzeng at Polaris said China Air will probably fill about 76 percent of its cargo space this year, compared with 75 percent last year. It's "a good performance," given that the airline's cargo capacity has risen about 5 percent this year, he said.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”