EVA Airways Corp (長榮航空), Taiwan’s second-largest carrier, may delay a share sale valued at NT$3.8 billion (US$115 million) because of the global financial turmoil.
“Maybe we will wait for awhile,” president James Jeng (鄭光遠) said in an interview on Friday. “The external change is quite big.”
EVA Air joins PT Garuda Indonesia, the biggest Indonesian carrier, in considering postponing a share sale plan because of the global economic slowdown and plunging stock markets. The Taiwanese carrier has tumbled 24 percent since announcing the share sale plan on July 16.
EVA Air drew up plans to sell 500 million new shares to pay for three Boeing Co 777-300ERs due to be delivered by the end of 2010. The value of the share sale was calculated based on Friday’s closing price.
The airline added 5.1 percent to NT$7.98 at 10:51am in Taipei trading yesterday. It has fallen 41 percent this year.
EVA Air and larger rival China Airlines (華航) both made third-quarter losses as the weakening economy dampened demand for business and leisure flights. The two carriers also both made losses from wrong-way bets on fuel prices.
The start of more services to China may help cushion the effect of the economic slowdown, said Lin Jyh-jong (林志忠), EVA Air’s executive vice president, project division.
China and Taiwan agreed to allow carriers to fly 108 weekly flights across the Taiwan Strait earlier this month and also scrapped a requirement for services to pass through Hong Kong airspace. The transport deal, which also included shipping and postal links, followed the highest-level talks between the two sides in almost 60 years. Weekend tourist flights began in July.
“The growth of Chinese visitors to Taiwan will be faster probably than of Taiwan visitors to China,” Lin told reporters at an airline conference in Taipei. “We’re talking about three times or four times the demand in the future.”
There are currently 312 flights a week between Taiwan and Hong Kong, and another 156 services between Taiwan and Macau, Lin said. Taiwan visitors to China increased 5 percent to 4.6 million last year, while arrivals from China climbed 30 percent to 316,000, he added.
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