EVA Airways Corp (
The airline's nine-month net income fell 49 percent to NT$1.37 billion, making the full-year earnings likely to trail the NT$3.24 billion (US$100 million) in 2004, EVA Airways Executive Vice President Nieh Kuo-wei (
"The past year was one of the most daunting challenges we've ever faced in the airline industry," Nieh said in an interview yesterday in Taipei. "Breaking even in the fourth quarter would have been an achievement by itself."
Global airlines may report an industry loss of US$4 billion this year as the average price of crude oil rises to US$53 a barrel from US$48, according to an estimate by the International Air Transport Association. That's spurring Cathay Pacific Airways Co, EVA Airways and other Asian carriers to hedge fuel, cut costs, add surcharges and switch to fuel-efficient planes to maintain their earnings.
The price of jet fuel jumped to a record US$85.36 a barrel on Oct. 3 in Singapore, according to Platts pricing service. Fuel, which rose 49 percent last year, is the single-biggest expense for Asian airlines, which have lower labor costs than US and European carriers.
Combined profits at Asian airlines fell 42 percent to an estimated US$1.5 billion last year, said IATA, which represents 265 carriers worldwide. Cathay Pacific, Asia's No. 3 airline by market value, posted a 25 percent decline in profit for last year even though it carried a record number of passengers and cargo.
EVA Airways shares fell for a second day today, dropping 0.4 percent to a six-month low of NT$12.30 in Taipei. The stock has fallen 15.5 percent in the past 12 months, lagging behind the 7.1 percent gain in the key Taiex index.
The airline's sales for last year rose 6.5 percent to NT$88 billion, according to a filing to the Taiwan Stock Exchange. Passengers contributed to 46 percent of last year's sales, compared with 47 percent by cargo, the company said.
EVA Airways, scheduled to increase flights to northern Japan's Hokkaido and the US West Coast, expects this year's passenger traffic growth to be "stable," Nieh said.
EVA Airways' cargo yield, or the amount of cargo revenue earned for every tonne-kilometer flown, rose to a four-year high of NT$7.56 last year, as Taiwan's increasing exports of semiconductor chips and cellular phones boosted air freight.
The airline, which placed a US$1.5 billion order in 2004 for eight Boeing Co 777-300ER aircraft, adding to a purchase of four of the same model and three 777-200LRs in 2000, said it will fly the new planes to Los Angeles, Seattle, San Francisco and to Europe, using older 747-400s for cargo.
EVA Airways received its first two Boeing 777-300ER aircraft last year. The 777-300ER can carry 365 people as far as 7,880 nautical miles (14,594km), or non-stop from Taipei to London or New York.
The 777-200LR, which can fly a maximum 9,420 nautical miles with 301 people on board, is the world's longest-range commercial plane.