Thu, Sep 30, 2010 - Page 11 News List

Shares in CAL, EVA soar on more direct cross-strait flights

STAFF WRITER, WITH CNA

Shares of China Airlines Ltd (CAL, 中華航空) and EVA Airways Corp (長榮航空) soared yesterday after China’s civil aeronautics authorities agreed to raise the number of direct flights across the Taiwan Strait, dealers said.

CAL’s shares rose 4.07 percent to NT$23 (US$0.73) and EVA gained 3.84 percent to NT$28.40, while the TAIEX closed up 0.63 percent at 8,240.89.

The Taiwan Affairs Office of China’s State Council announced earlier yesterday the increase in the number of cross-strait flights, including an additional 14 flights to Shanghai, four to Beijing, four to Shenzhen, 11 to Xiamen and Fuzhou, two to Qingdao and one to Changsha.

“The destinations in the announcement mostly are very popular and the increase in the number of flights has been long anticipated by the carriers and investors,” Taiwan International Securities (金鼎證券) analyst Michael Chiang said.

Both CAL and EVA have said the load factor of the flights to major Chinese cities, such as Shanghai, Shenzhen and Beijing, exceeded 90 percent and an empty seat was a rare thing on the routes.

“The increase in the number of flights is expected to further boost the two carriers’ bottom lines as the global airline business recovers,” Chiang said. “That’s definitely what investors want to see.”

In the first half of this year, CAL posted NT$6.27 billion in net profit, while EVA registered NT$5.22 billion in net profit.

Chiang said investors still have high hopes that Taiwan and China will soon iron out a plan to allow direct cargo flights across the Strait.

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