China Airlines' losses decline in second quarter

China Airlines Ltd (中華航空), whose chairman offered to resign this week after one of its planes was destroyed by a fire, said that losses in the second quarter narrowed on lower fuel costs and increasing travel demand.

Net loss was NT$62.4 million (US$1.9 million) in the three months ended June 30, compared with a loss of NT$257.1 million a year earlier. The numbers were derived by subtracting first-quarter results from six-month figures released yesterday.

The carrier said sales rose 7.4 percent in the period, as economic growth boosted passenger traffic.

Company chairman Philip Wei (魏幸雄) offered to resign after a Boeing Co 737 burst into flames at Japan's Naha Airport on Monday.

"The worst is over for the company," said Stone Lin, an analyst at Yuanta Core Pacific Securities Co (元大京華證券), who has a "buy" rating on the stock.

Second-quarter sales totaled NT$31 billion, based on monthly filings to the Taiwan Stock Exchange. Johnson Sun (孫鴻文), a spokesman for the Taipei-based carrier, declined to comment on the derived numbers.

China Airlines will likely post a third-quarter profit given growing exports, Lin said.

The Naha fire will probably have a limited effect because of insurance, he said.

All 165 people onboard escaped from the plane, which had just landed.

China Airlines shares climbed NT$0.05, or 0.39 percent, to NT$12.85 on the Taiwan Stock Exchange before the earnings announcement. The stock has fallen 16 percent this year.

The airline posted a loss of NT$868.3 million in the first half of the year, compared with a profit of NT$128.1 million a year earlier, it said in a filing to the stock exchange yesterday.

The nation's airports handled 4.3 percent more passengers on international flights in the first half than a year earlier, according to the statistics bureau.

Jet fuel, the biggest expense for most Asian airlines, averaged US$82.09 in the second quarter in Singapore, 3.9 percent less than a year earlier, data compiled by Bloomberg showed.