Thu, Nov 16, 2006 - Page 12 News List

EVA blames sky-high fuel for red ink

OPTIMISTIC OUTLOOKS A senior airline official said falling fuel prices would help the company's bottom line next year, which will also be boosted by new flights to Mumbai

By Jessie Ho  /  STAFF REPORTER

EVA Airways Corp (長榮航空), the nation's second-largest carrier, said it may remain in the red this year, despite falling fuel prices.

"The recent decline in fuel costs will help our profit for next year rather than helping turn around our finances this year," EVA Airways senior vice president Nieh Kuo-wei (聶國維) said yesterday.

Nieh made the remark on the sideline of a press conference launching EVA's Taipei-to-Mumbai passenger service.

For the first three quarters of the year, EVA Airways saw its net loss climb to NT$2.32 billion (US$70.7 million), or NT$0.63 per share, because of high oil costs.

During the January to September period, the airline spent NT$5 billion to NT$6 billion more on fuel than it did during the same period last year, Nieh said.

Sales were certain increase in the brisk passenger and cargo sectors, Nieh said.

EVA posted sales growth of 7.96 percent to NT$77.97 billion for the first 10 months of the year from a year ago.

The deficit has had an impact on the airline's aircraft procurement plan. It had planned to buy 10 Boeing 777-200 cargo planes in June last year, on top of 12 Boeing 777-300ER and three Boeing 777-200 LR passenger jets it had previously ordered.

But the airline has now decided to change the two Boeing 777 passenger jets on order to Boeing 777 freighters. It is also converting six of the Boeing 747-400 Combi and two Boeing 747-400 passenger planes in its fleet to cargo aircraft, Nieh said.

The conversion is being done by Israel Aircraft Industries Ltd and the first converted cargo plane will be delivered in April, Nieh said.

EVA Airways' affiliate Evergreen Aviation Technologies Corp (EGAT, 長榮航太) is converting three Boeing 747-400 passenger jets to cargo freighters for Boeing. It is the first Taiwanese company capable of carrying out such conversions. But since EGAT is working to capacity, EVA had to outsource the additional conversions to the Israeli company, Nieh said.

He refused to reveal the value of the deal.

Meanwhile, the airline is banking on growing traffic on the Taipei-Mumbai route with its launch of direct flights to India's largest and most populous city.

India has become one of the most popular travel destinations for people in Taiwan, said Alok Dimri, vice chairman of the India-Taipei Association, at the press conference.

The association has issued 28,000 visas to Taiwanese travelers so far this year and expects to process another 2,000 before the end of this year.

In addition to Taiwanese tourists and Indians working in Taiwan, the flights will also serve business passengers transiting from North America, whom the airline expects to fill half the seats on the route, Nieh said.

EVA Airways has adjusted the schedules of some of its flights from Los Angeles and San Francisco to shorten the Taipei transit time for Mumbai-bound passengers to about two hours, he said.

EVA Airways launched a cargo service between Taipei and Mumbai in 1999, followed by Taipei-New Delhi cargo flights in 2003.

China Airlines (華航) began regular passenger flights between Taipei and New Delhi in 2001.

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