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EVA Air profit drops 74 percent in Q4

EVA Airways Corp (長榮航空), the nation's second biggest air carrier, had a 74 percent drop in fourth-quarter profit as record jet-fuel costs eroded earnings.

Net income fell to NT$546 million (US$17.1 million) in the three months ended Dec. 31, from NT$2.14 billion a year earlier, according to Bloomberg's calculation of the Taipei-based airline's full-year and nine-month earnings. Fourth-quarter sales rose 18 percent to NT$22.6 billion, EVA Airways said.

Like Singapore Airlines Ltd and other Asian carriers, EVA Airways' profit was damped by the cost of fuel, which surged 70 percent to a 14-year record in October. The price of fuel, typically between 15 percent and 40 percent of an airline's costs, made up more than 30 percent of EVA Airways' cost, up from 28 percent in 2003, according to an estimate by Polaris Securities Co's (寶來證券) analyst Peter Tzeng.

"Fourth-quarter profit won't be so good as a year ago, as fuel costs increased a lot," Tzeng said.

EVA Airways' unaudited net income for last year rose to NT$3.22 billion, from NT$1.40 billion posted in 2003. Earnings per share totaled NT$1.05 for last year, the airline said.

The company's shares fell 3 percent to NT$14.55 in Taipei yesterday before earnings were released. The stock has dropped 6.7 percent this year, compared with a 4.8 percent decline in the benchmark TAIEX.
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