EVA Airways plans share sale to pay for new planes

EVA Airways Corp (長榮), Taiwan's second-largest carrier, said it is planning its first sale of additional shares in more than a year to raise funds to pay for new aircraft.

EVA may sell 360 million new shares by March next year, or about 10 percent of existing stock, raising between NT$4 billion and NT$5 billion (US$119 million and US$149 million), said Katherine Ko (柯文玲), public relations officer at the company.

Asian airlines are upgrading their fleets, using new planes that burn less fuel to improve efficiency and cut costs, amid record jet-fuel prices.

Some carriers are also expanding to cater to increasing demand for overseas air travel by tourists from China, South Korea and Japan.

Australia's Qantas Airways Ltd, Singapore Airlines Ltd and Hong Kong's Cathay Pacific Airways Ltd are all considering new plane orders from Airbus SAS and Boeing Co to upgrade and expand their fleets.

Record oil prices may cause global airlines to post US$7.4 billion of combined losses this year while the industry's fuel bill surges to US$97 billion, based on an average crude oil price of US$57 a barrel, according to the International Air Transport Association.

Shares of EVA fell 1.4 percent to a five-day low of NT$14.10 in Taipei after the carrier announced its plan to sell additional shares.

The stock has declined 8.7 percent this year, performing worse than a 1.3 percent fall in the benchmark TAIEX.

EVA ordered 15 Boeing 777-300ER and 777-200LR planes in 2000 and April last year valued at US$3 billion, taking delivery of them from this year.

The airline is in talks for a US$2 billion order of 10 Boeing 777-200LRs for flying long distances, EVA said in June.

EVA, which has about 50 aircraft in its fleet, paid US$138.6 million in November last year for an Airbus A330-200 aircraft.

"The timing of the share sale is in accordance with the schedule of plane delivery," EVA's executive vice president Nieh Kuo-wei (聶國維) said yesterday, without giving details.

Demand for air travel rose in the first eight months of the year, with Taiwan's residents making 5.69 million overseas trips, or 7.4 percent more than last year, according to government statistics.

The country received 2.2 million visitors from abroad during the same period, 16 percent more than a year earlier.

EVA and larger rival China Airlines Ltd (華航) may benefit from a possible increase in visitors from China, which said in May it plans to relax restrictions for tourists traveling to Taiwan.

Last year, 153,190 people from China visited Taiwan, mostly to visit relatives or for business and cultural exchanges, according to the government.

Total visitor numbers were 2.95 million, according to Taiwan's tourism bureau.