EVA Airways Corp (EVA, 長榮航空) yesterday announced plans to spend US$100 million to upgrade the business class on its 15 Boeing 777-300ER aircraft, in the hope that a focus on premium customers will help to increase revenue.
EVA, the nation’s second-largest carrier, will complete the upgrade by August next year, with first plane to be finished by the end of this month set to start operating on the Taipei-New York route from June 2.
“Faced with tougher economy-class service competition, the company is looking to attract more premium customers through the upgrade,” EVA president Chang Kuo-wei (張國煒) told a media briefing.
Photo: Lo Pei-der, Taipei Times
Chang said the rise of budget airlines had made it increasingly difficult for carriers to focus solely on economy class, which was why EVA had decided to follow Cathay Pacific Airways and Singapore Airlines by targeting business-class customers.
To achieve this goal, EVA would reduce the number of business-class seats, but could increase the price by up to 20 percent, further helping increase company revenue, Chang said.
While market observers remain downbeat about the prospects of the airline sector this year, Chang said it was always good to invest more when economic sentiment was close to the bottom because of lower costs.
Photo: Lo Pei-der, Taipei Times
Meanwhile, Chang said he expected the company’s revenue to improve in the second quarter from the first quarter on the back of higher cargo sales led by stable freight rate and volume.
However, the carrier’s performance during the July-to--September period, the peak season for passenger demand, would remain the most important driver for the company this year, he added
In addition, rising crude oil prices continue to increase cost pressure and affect the company’s profitability, he said.
Photo: Lo Pei-der, Taipei Times
“Actually, we are likely to improve our sales performance this year,” Chang said. “The only downside is that all our hard work is -going to benefit the oil companies.”
However, EVA had no plans to buy an oil refiner like Delta Air Lines Inc did, as the company does not have the necessary expertise to run an oil refining -company, Chang said.
EVA reported NT$1.08 billion (US$36.9 million), or NT$0.33 per share, in net losses for the first quarter of the year, compared with profits of NT$269.32 million, or NT$0.08 per share, a year earlier, Taiwan Stock Exchange (TWSE) data showed.
However, revenue for the company totaled NT$25.57 billion in the January-to-March period, up 5.7 percent from the previous year, statistics showed.
EVA’s shares fell 0.28 percent to close at NT$17.95 on the TAIEX yesterday, stock exchange data showed.
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