Mon, Mar 23, 2009 - Page 12 News List

Cross-strait flights defy tough times with popularity

STAFF WRITER, WITH CNA

A steep decline in travel demand since the final quarter of last year has led to flight reductions or route cancellations by air carriers worldwide. But there is one exception to this development — direct air services between Taiwan and China that are becoming increasingly popular.

The cross-strait daily charter flights inaugurated on Dec. 15 recorded an average passenger load factor of more than 70 percent during the first two months of operations.

The load factor rose again this month, reaching 86.8 percent in the second week and more than 90 percent by the third week, statistics from the Civil Aeronautics Administration (CAA) showed.

“Given the fact that March is usually an off season for the travel industry, the performance of the cross-strait charters stands out,” said Yeh Yung-ching (葉永清), director of the CAA’s air transport division.

Travel agent Lin Ko-pen (林哥本) said that cross-strait flight tickets for travel periods of up to one month have almost all sold out, striking a sharp contrast to the slow sales for other routes.

For example, although tickets to Europe are being sold at discount prices, demand has not risen, the travel agent said.

“Seats are available at any time for flights to Europe and flight reservations to Southeast Asia are also not very much in demand,” Lin said.

Because of rising fuel prices in the first half of last year and the outbreak of the global financial crisis in the second half of last year, all five airlines companies in Taiwan recorded losses.

The two largest carriers — China Airlines (華航) and EVA Airways (長榮) — each reported deficits of more than NT$10 billion (US$295.8 million).

However, a recovery now seems possible because of the strong demand for cross-strait flights and the rapid expansion of air services to meet that demand.

The growing number of Chinese traveling to Taiwan and the estimated 1 million Taiwanese businesspeople and executives operating in China are the backbone of this market.

CAA Director-General Lee Long-wen (李龍文) said the fast growth of passenger loads on cross-strait flights signaled an immediate need for increased capacity.

He proposed that before the charter services are further upgraded to regular commercial flights, air carriers should increase the number of flights they provide on the cross-strait route.

He said that once services became regular and flight frequencies increased, there would be room for airfare cuts.

EVA Airways spokesman Nieh Kuo-wei (聶國維) said that with more frequent flights, the airline companies operating the service would have greater flexibility in how they manage their fleets.

Also, because of the larger cargo capacity on regular commercial flights, operating costs would be lower and revenues higher, he said.

However, supply and demand remain the most important factors in determining airfares, he said.

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