China Airlines, rival EVA report higher Q3 profits

China Airlines (華航), the nation's largest air carrier, and rival EVA Airways Corp (長榮) both reported higher third-quarter profits, as they flew more passengers and carried more exports amid the nation's economic recovery.

Net income of China Airlines rose 65 percent to NT$2.17 billion (US$66 million) for the three months ended Sept. 30, while sales rose 28 percent to NT$26.26 billion. EVA Airways had a 61 percent increase in net income in the same period, rising to NT$1.4 billion.

"The passenger business is especially good this year," said Nieh Kuo-wei (聶國維), an EVA spokesman. Flights to the US and Northeast Asian destinations such as Japan and South Korea were the most popular for EVA's customers, he said.

Like other Asian carriers, China Airlines and EVA Airways have been carrying more air travelers on holidays abroad as the region recovers from the slump caused by last year's SARS outbreak. The volume of air cargo, which rose in the third quarter due to rising demand for Taiwanese electronics exports, may taper in the final quarter, analysts said.

"The third quarter might have been the peak" for these airlines, said Peter Tzeng, an analyst at Polaris Securities Co (寶來證券).

"Sales and profit in the fourth quarter will likely be lower than the third," due to "weaker electronics demand in the fourth quarter," he said.

On the Taiwan Stock Exchange, China Airlines' shares fell 0.6 percent to NT$17.70, while EVA Airways' shares fell 1.1 percent to NT$13.25 before the results were announced. More Taiwanese residents took to the sky as the nation's economic recovery picked up pace, expanding 7.7 percent in the second quarter following 6.7 percent growth in the first three months.

The nation's residents made almost 5.3 million trips in the first eight months of the year, 46 percent more than the same period last year, according to the transport ministry.

Passengers accounted for 53 percent of China Airlines' sales in the third quarter, during which many Taiwan residents traveled. That compares with 50 percent in the second quarter.

"China Airlines is benefiting more from passenger business" than cargo operations, said Tu Jin-lung (杜金龍), chairman of Grand Cathay Investment Services Co (大華投信).

Cargo made up 41 percent of China Airlines' sales in the third quarter, down from 44 percent in the second quarter, according to the Taiwan Stock Exchange Web site.

China Airlines will probably fill an average 76 percent of seats this year, up from 69 percent last year, Tzeng said.

China Airlines yesterday introduced a range of European-style dishes for its Taipei-Frankfurt route.