Sat, Aug 11, 2012 - Page 14 News List

Strong seasonal demand bolsters airline revenues

ON CLOUD NINE:Taiwan’s three biggest airlines saw revenues increase last month as passenger numbers rise over the summer months and fuel prices continue to fall

By Amy Su  /  Staff reporter

The nation’s two largest airlines reported the highest revenue of the year last month, citing growth in passenger traffic as a key contributing factor.

China Airlines Ltd (CAL, 中華航空), the nation’s largest air carrier, posted NT$12.42 billion (US$414.14 million) in revenue last month, up 1.24 percent from a year earlier and 8.38 percent from June, the company said in a stock exchange filing on Thursday.

“The strong sales growth in the passenger sector helped raise the company’s revenue,” Capital Securities Corp (群益證券) said in a research note.

Revenue from CAL’s passenger business increased 8.17 percent year-on-year to NT$8.47 billion last month, which was 16.19 percent higher than the NT$7.29 billion recorded in June.

The strong seasonal demand also boosted EVA Airways Corp’s (EVA, 長榮航空) revenue last month.

Revenue of the nation’s second-largest airline marked the highest level in history for last month by totaling NT$10.05 billion, up 8.41 percent and 3.5 percent from a month and a year earlier respectively, company financial data showed.

EVA’s passenger business posted NT$6.59 billion in revenue last month, up 11.89 percent from June and 12.46 percent from the same period last year.

Capital Securities said it expected the air carriers’ revenue to stay at a high level this month, as the seasonal effect in the passenger sector still exists.

The stronger sales, as well as more reasonable aviation fuel prices in the quarter, may raise the airlines’ profitability in the third quarter, the local brokerage said.

“The airlines will make the highest quarterly profits in the third quarter of this year,” the note said.

However, continuous weak cargo sales remain the air carriers’ major source of worry for revenue and profit.

Last month, CAL’s cargo revenue totaled NT$3.42 billion, down 14.93 percent and 8.56 percent from a year ago and a month ago respectively.

Meanwhile, EVA posted NT$2.82 billion in cargo revenue for last month, which was 0.35 percent lower than June and 13.23 percent lower than the previous year.

The rebounding trend in international crude oil prices, which started from last month, could be another drag on air carriers’ profitability in the near future, Capital Securities added.

Revenue for TransAsia Airways Corp (復興航空) — the third listed Taiwanese airline, which focuses on the regional passenger business — also hit a record-high of NT$965.82 million last month, up 11.8 percent and 25.94 percent from a year and a month earlier respectively, company statistics showed.

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