Fri, Apr 12, 2013 - Page 14 News List

Airlines hit by weak cargo sector

COME FLY WITH ME:Although passenger sales were up, the poor performance of the cargo sector and concern over the avian flu situation dampened the industry’s outlook

By Amy Su  /  Staff reporter

Despite reporting continual growth in the passenger sector, the nation’s two major airlines saw their consolidated revenue last month decline from a year earlier due to the impact of weak demand in the cargo sector.

China Airlines Ltd (CAL, 中華航空), the nation’s largest carrier, posted NT$11.7 billion (US$390.9 million) in consolidated sales last month, down 1.29 percent from a year earlier, but up 9.13 percent from February, the company said in a filing to the Taiwan Stock Exchange.

The firm’s passenger sales totaled NT$7.42 billion last month, up 9.76 percent from a year earlier. On a monthly basis, passenger revenue dropped by 3.13 percent last month due to slowing seasonal demand after the Lunar New Year holiday in February.

DEMAND DOWN

The ongoing weak demand in the cargo sector also dragged down the company’s sales last month. Revenue from CAL’s cargo business slid 9.67 percent year-on-year to NT$3.55 billion last month, but was up 43.15 percent on the previous month.

CAL chairman Sun Hung-hsiang (孫洪祥) last month said he expected the cargo sector’s prospects to improve in the second quarter, following the launch of various consumer electronics devices.

EVA Airways Corp (EVA, 長榮航空), the nation’s second-largest carrier, reported a similar trend.

The carrier’s consolidated revenue inched down 1.43 percent to NT$9.95 billion last month from the previous year, a 7.22 percent rise from February, the company said in a stock exchange filling.

Passenger sales reached NT$5.55 billion last month, up 9.47 percent from a year earlier and up 1.46 percent from a month earlier.

Revenue from its cargo business fell 7.74 percent year-on-year to NT$2.98 billion last month, which was also a 37.33 percent increase from the previous month.

Smaller rival TransAsia Airways Corp (TNA, 復興航空) saw its consolidated revenue last month climb 26.89 percent from a year earlier on the back of its focus on the regional passenger business.

TNA posted NT$978.6 million in sales last month, backed by various international routes launched during the past year.

However, SinoPac Securities Investment Service Co (永豐投顧) analysts said yesterday that the three companies could still face losses in the first quarter due to higher fuel costs, with losses forecast of NT$820 million for CAL, NT$490 million for EVA and NT$23 million for TNA.

PROFIT IMPACT

In addition, if the avian flu situation worsens in China, it would have a bigger impact on TNA’s profit outlook than the other two carriers, because cross-strait routes account for 35 percent of TNA’s total routes, but just 15 percent for CAL and 12 percent for EVA, SinoPac said.

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