Mandarin Airlines eyes new jets

Mandarin Airlines (華信航空), a unit of Taiwan's largest air carrier China Airlines, said it was in talks to buy or lease eight jetliners to renew its fleet of propeller-driven aircraft for flying regional routes.

Mandarin Airlines is choosing between the 737-700 model made by Boeing Co, the A319 made by Airbus SAS and the Embraer 190 made by Empresa Brasileira de Aeronautica SA to replace its 11 Fokker planes, the carrier's Chairman, Michael Lo, (樂大信) said.

"We're conducting an intensive study now," Lo said yesterday.

"We'll talk with banks and leasing companies on whether to buy or lease them," he said.

Mandarin Airlines is seeking to expand capacity, like other Asian carriers including Cathay Pacific, to tap rising travel demand and lower costs with fuel-efficient planes amid rising oil prices.

The planes may be used to fly to regional destinations, including Seoul, Hong Kong, Cebu island in the Philippines and Myanmar's capital Yangon. The airline will make a decision by May, taking delivery of the first aircraft in April next year and receiving all of them before the end of 2009, Lo said.

Mandarin Airlines' fleet includes three leased Boeing 737-800 planes, six Fokker-100s and five Fokker-50s, Mandarin Airlines' spokeswoman Linda Hsiao (蕭曉玲) said. Mandarin Airlines owns two of the Fokker-100s and all the Fokker-50s, she said.

Meanwhile, China Airlines Ltd (CAL, 中華航空), Taiwan's leading carrier, said yesterday its net profit last year fell 88 percent from a year earlier due to surging fuel costs.

Profit down

CAL posted a NT$500 million (US$15.43 million) net profit last year, compared with NT$4.18 billion in 2004, the company said.

Pretax profit last year was down to NT$700 million from NT$4 billion in the previous year, while sales rose to NT$108.69 billion from NT$96.18 billion.

The earnings fall was largely due to higher fuel costs amid a spike in crude oil prices, a company official said.

The official said its cargo operations registered a loading factor of over 70 percent in January and 60 percent last month.

Its current loading factor stands at over 90 percent.

"The company's cargo segment contributed to about 80 percent of the company's total profits last year," he said.

"The cargo business is seen bringing in more than NT$50 billion of revenue this year, against NT$48 billion last year," he said.

Meanwhile, six new aircraft are expected to join company operations this year.

"We are slated to take delivery of four new A330-300 passenger jets and two B747-400F freighters this year," company chairman Philip Wei (魏幸雄) said, adding CAL is due to retire four A300-600R passenger aircraft.

CAL owns a fleet of 66 airplanes with an average age of 4.9 years.

Wei said the company is also seeking new routes to Japan and targets 1,800 charter flights for passenger services to the country this year.

Wei added CAL plans to invest NT$3 billion to NT$4 billion to build a new headquarters, a training center and a crew center close to CKS airport in Taoyuan, south of Taipei.

"We plan to relocate our headquarters from Taipei city to the airport area in 2009 or 2010 and lease the current headquarters [to generate incomes]."