EVA Airways Corp (EVA, 長榮航空), the nation’s second-largest air carrier, plans to launch four rounds of airplane replacements by the end of next year, saying the slowing global economy could save it money when purchasing new aircraft, a company official said yesterday.
Uni Airway’s (立榮航空) — an EVA subsidiary — purchase of 10 ATR 72-600s aircraft, also launched yesterday, would be the first round of the replacement plan, the official said, adding that these new airplanes would start joining the fleet from September next year.
“It is not because the company has immediate demand for new airplanes,” EVA president Chang Kuo-wei (張國煒) told a press conference. “Buying an aircraft during the economic contraction period helps the company get the best deal.”
Photo: CNA
Chang cited the view from his father, Evergreen Group (長榮集團) chairman Chang Yung-fa (張榮發), that the global economy would be weak for the next two years as one of the main factors for launching the replacement plan.
Following the first round of the plan, which will cost about US$220 million, the company would replace another 18 narrow-body aircraft, 15 to 20 airplanes in the Boeing 777 series, and 11 Airbus 330 aircraft in succession, Chang said.
“By booking the aircraft makers’ slots earlier, we hope all these deals could be finalized by the end of next year,” he said, adding that it usually takes about two years — at least 15 months — from ordering to the delivery of the airplane.
Chang expects the momentum of passenger services to stay as strong as the previous year, but remains conservative about cargo services because of Western countries’ weakening demand for consumer electronic products.
“We have not seen the seasonal demand for cargo business show up yet,” Chang said, adding that its strong momentum last year might only represent electronic firms’ inventory replenishment after bottoming out, instead of reflecting a real rebound.
However, Chang said the air carrier can adjust to the weakening cargo demand.
“There are three airplanes for cargo business to be replaced by year end, but now we’ve decided to eliminate them instead of purchasing new planes for the replacement,” he added.
In addition, EVA’s application for airline alliance membership with Star Alliance may receive positive feedback by the end of the year, further driving up passenger business, the company said.
In the first eight months, revenue at the company dropped 1.22 percent to NT$68.96 billion (US$2.36 billion), the company’s financial data showed.
Net profit totaled NT$636.33 million, or NT$0.11 per share, in the first half of the year, compared with NT$5.46 billion, or NT$1.76 per share, a year ago, the data showed.
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