Tue, May 09, 2006 - Page 11 News List

EVA Airways seeks NT$10.4bn loan to buy aircraft

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EVA Airways Corp (長榮航空), Taiwan's second-largest carrier, is seeking a NT$10.4 billion (US$331.1 million) loan to buy two aircraft from Boeing Co, according to bankers involved in the deal.

EVA Airways is purchasing the Boeing 777-300ERs to meet rising passenger traffic. As many as 3.73 million people traveled through the nation's international airports in the first two months of this year, 8 percent more than last year, according to the Directorate General of Budget, Accounting and Statistics.

About 10 banks including Bank of Taiwan (台灣銀行) and International Commercial Bank of China (中國國際商銀) are bidding for the loan, which is for 12 years, bankers said.

The carrier filled 79 percent of seats in the first quarter, up from 78 percent a year ago while the use of cargo space climbed to 74 percent from 72 percent, EVA Airways said last Tuesday.

EVA Airways, based outside Taipei, is renewing its long-haul fleet to cut fuel costs and win passengers. It ordered 12 Boeing 777-300ER airplanes, two of which it has received, and three 777-200LRs, according to the company. The airline will fly the new planes to Los Angeles, Seattle, San Francisco and Europe.

EVA Airways' largest local rival China Airlines (華航) joined EVA in expanding its fleet, renting two new planes last month from leasing companies Chai Lease Finance Corp and All Win International Finance Corp. The two companies borrowed NT$8 billion for 12 years to buy the two planes that China Airlines wanted to rent.

The leasing companies paid an interest margin of 45 basis points, or 0.45 percentage point, over the market interest rate on commercial paper, for each loan, bankers said. Commercial paper is an unsecured short-term promise to repay principal on a specific date.

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