Wed, Apr 04, 2007 - Page 12 News List

Cost controls, more flights boost China Air

By Jessie Ho  /  STAFF REPORTER

Undaunted by high oil prices, China Airlines Ltd (CAL, 華航), Taiwan's largest carrier, yesterday posted earnings for last year that were slightly improved on 2005 after increasing flights and meticulous cost control.

The Taipei-based China Airlines saw its net income reach NT$738.35 million (US$22.3 million), or NT$0.2 per share, on sales of NT$121.99 billion for last year, compared with after-tax earnings of NT$645.23 million, or NT$0.19 per share, on sales of NT$118.37 billion in 2005.

The improvement was the result of increased cargo and passenger flights, as well as stringent cost control, CAL spokesman Johnson Sun (孫鴻文) said.

The carrier added flights to Japan, Cambodia and other countries last year, and business from direct charter flights between Taiwan and China during the Lunar New Year and Mid-Autumn Festival holidays also helped boost profits, Sun said.

CAL chairman Philip Wei (魏幸雄) had predicted an increase in sales of 6 percent to 7 percent this year.

The company was expecting bigger profits this year as oil prices fell from last year's high level, but the recent surge in oil prices may dash its hopes.

Crude oil hovered around US$65 a barrel yesterday, up from less than US$60 two weeks ago.

The carrier would issue a cash dividend of NT$0.12 and a stock dividend of NT$0.3, the company said in a filing to the Taiwan Stock Exchange yesterday.

Meanwhile, the high oil prices also prompted the Civil Aeronautics Administration to raise fuel surcharges.

The administration yesterday announced that it was increasing the fuel surcharge for short-haul flights, or flights to Asian countries, to US$15 per sector, up by US$2.50. The rate for long-haul flights was hiked US$6.50 to US$39 per sector, the administration said.

The new rates would apply to tickets issued after April 16, it said in a statement.

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