Tue, May 30, 2006 - Page 11 News List

Fuel costs scuttle CAL plane deal


China Airlines Ltd (CAL, 中華航空), the nation's largest international air carrier, has shelved plans to buy new planes following financial concerns over soaring fuel prices, news reports said yesterday.

The Chinese-language Commercial Times quoted CAL chairman Philip Wei (魏幸雄) as saying that the airline had planned to expand its fleet by introducing jumbo jets for long-range flights to the US and Europe.

"We planned to make a decision between B747-800 and Airbus A380," Wei said, referring to the latest offerings of planemakers Boeing and Airbus.

But since fuel prices have risen from an average of US$56 per barrel last year to more than US$75 this year, CAL had decided against the purchases, the paper said.

According to Wei, CAL would now also reduce the number of flights to New York, Rome and Houston for this year's summer schedule. Instead, it will concentrate on promoting flights to Japan, one of the top destinations for local tourists, and expand its cargo business.

CAL has already said it will launch three new routes to Japan starting next month -- Taipei-Osaka, Taipei-Sapporo and Kaohsiung-Nagoya.

The double-decker, 555-seat A380 is the world's largest passenger jet. It is scheduled to enter service later this year. Singapore Airlines will be the first airline to introduce the A380.

In March, Airbus sent Richard Carcaillet, marketing director for the A380, to Taipei. But neither CAL nor EVA Airways Corp (長榮航空), the nation's second-largest airline, made any purchases because of concerns over fuel costs.

The 450-seat B747-800 is 14 percent more fuel-efficient than the A380, giving it the lowest seat per kilometer cost of any passenger aircraft.

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