EVA goes into the red on cargo slump, rising jet fuel costs

EVA Airways Corp (長榮航空), the nation’s second-largest airline, swung to a fourth-quarter loss as cargo sales slumped and fuel costs surged.

The airline made a loss of NT$976 million (US$32 million) compared with a profit of NT$629 million a year earlier. The numbers were derived by subtracting nine-month results from full year figures released yesterday.

Earnings have plunged at EVA Air, Asiana Airlines Inc and other carriers after the cost of jet fuel jumped 53 percent last year. EVA Air and larger rival China Airlines Ltd (CAL, 中華航空) have also suffered from falling freight demand from technology companies.

“Oil prices are quite a serious problem,” said Vickie Hsieh (謝雯霞), who owns EVA Air stock among the US$1.4 billion she helps manage at President Investment Trust Corp (統一投信).

EVA’s fourth-quarter sales climbed 1.8 percent from a year earlier to NT$24.4 billion, monthly Taiwan Stock Exchange filings showed. Cargo revenue fell 2 percent to NT$10.9 billion in the October to December period.

Katherine Ko (柯文玲), a spokeswoman for Taoyuan-based EVA Air, confirmed the derived earnings figure.

Shares of EVA Air fell 3.3 percent to close at NT$17.60 on the Taiwan Stock Exchange yesterday, before the earnings announcement. The stock has climbed 30 percent this year, compared with a 5.2 percent gain for the benchmark TAIEX index.

For the full-year, EVA Air posted a loss of NT$1.87 billion last year, wider than its NT$1.69 billion loss in 2006, it said in a stock exchange filing yesterday.