Sat, Dec 10, 2011 - Page 12 News List

Revenues fall at China Airlines and Eva Airways

By Amy Su  /  Staff Reporter

Revenues at the nation’s two largest airlines both fell month-on-month last month as expected amid the weak season for passenger business and persistently weak demand in their cargo businesses.

China Airlines Ltd (CAL, 中華航空), the nation’s largest carrier, on Thursday posted NT$10.56 billion (US$349.62 million) in revenues for last month, down 5.75 percent from a year ago and 7.77 percent from a month earlier, data provided by the company showed.

Revenue from its passenger business dropped 4.23 percent from the previous month to NT$6.23 billion, reflecting traditionally weaker seasonal demand for last month, while revenue from its cargo business also fell 5.81 percent month-on-month to NT$3.89 billion after showing a rebound in October.

On an annual basis, the company’s passenger revenue showed 2.98 percent growth last month from a year ago, in line with CAL chairman Chang Chia-juch’s (張家祝) view that momentum in the company’s passenger business should remain steady this year.

However, Primasia Investment Consultancy Co sees increasing downside risk for CAL’s passenger business.

“The month-on-month drop and lower-than-expected annual growth in CAL’s passenger revenue last month suggested its passenger momentum has slowed,” Primasia said in a research note yesterday.

In addition, CAL also reported a 17.23 percent decrease in cargo revenue because of worsening global economic conditions and a tepid technology sector in Taiwan, Primasia said.

EVA Airways Corp (EVA, 長榮航空), the nation’s second-largest carrier, posted a similar trend in revenue for last month.

The carrier reported NT$7.94 billion in revenues last month, down 4.29 percent from a year earlier and 6.37 percent lower than the previous month, according to the company’s financial data released on Wednesday.

Revenue from EVA’s passenger business slid 3.93 percent from the previous month to NT$4.64 billion, while revenue from its cargo business declined 10.48 percent month-on-month to NT$2.82 billion.

Compared with the same period last year, EVA’s passenger revenue rose 10.48 percent, while cargo revenue sharply declined by 20.11 percent, data showed.

Looking forward, Primasia said airfreight business was likely to remain sluggish, with a recovery unlikely before the second quarter of next year.

Nevertheless, Capital Securities Corp (群益投顧) expected EVA to outperform its peers in cargo because the company has a more flexible fleet.

A plan to sell two MD-11F cargo aircraft may also help save EVA more fuel costs next year, further allowing it to deal appropriately with the slowing demand caused by global economic uncertainties, Capital Securities said in a research report.

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