Thu, Jul 05, 2012 - Page 13 News List

EVA cautious on Q3 outlook for air freight rates

By Amy Su  /  Staff reporter

EVA Airways Corp president Chang Kuo-wei, second right, awards the company’s first Hello Kitty golden boarding pass to Wei Yen-ming, second left, who had traveled on seven Hello Kitty flights in 88 days, at a press conference in Taipei yesterday.

Photo courtesy of EVA Airways Corp

EVA Airways Corp (EVA, 長榮航空), the nation’s second-largest carrier, yesterday said it was maintaining a conservative outlook on air freight rates in the third quarter amid a price-cutting competition started by foreign airlines, alghouth overall demand on the cargo sector would remain steady in the quarter.

“The cargo business would be a little down [in the third quarter],” EVA president Chang Kuo-wei (張國煒) told reporters after holding a press conference about the company’s Hello Kitty-themed aircraft.

However, the airline’s cargo business may see some upside catalysts in the second half of the year, driven by the launch of new electronics products, he said.

The debut of Apple Inc’s iPhone 5 and iPad Mini, as well as new Ultrabook models, may raise overall cargo demand and momentum, he added. EVA posted NT$2.92 billion (US$97.78 million) in cargo sales in May, down 12.84 percent from a year ago, company data showed.

On the passenger front, Chang said seasonal demand would support the business during the July-to-September quarter as expected.

The company’s five Hello Kitty-themed aircraft also helped boost the momentum for the sector, with the average passenger load reaching 85 percent to 90 percent since their launch, EVA said.

Although crude oil prices have recently rebounded, Chang remained optimistic that the carrier would make a profit in the third quarter, as current price levels are still within the company’s expectations.

However, rising competition from low-cost carriers in Asia has made it even more difficult for regular airlines to make a profit from their economy-class operations, Chang said.

EVA has therefore been gradually shifting its focus to the business class by upgrading its cabins and services to attract more business passengers, he said.

Creating new ideas, such as the launch of the Hello Kitty flights, will be more important for full-service airlines and help the industry’s development, he said.

This story has been updated since it was first published.

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