Fri, Apr 26, 2013 - Page 13 News List

Airlines’ shares fall, CAL reports code-sharing service

By Amy Su  /  Staff reporter

China Airlines president Sun Hung-hsiang, left, and Dmitry Stolyarov, first deputy director general of Russia’s Transaero Airlines, trade models of their companies’ airplanes in Taipei yesterday during a code-share signing ceremony for a new route between Taipei and Moscow via Bangkok that is due to start operating on Wednesday next week.

Photo: Yao Chieh-hsiu, Taipei Times

The nation’s three listed airlines yesterday saw their share prices close down by more than 2 percent — compared with the benchmark index’s 0.02 percent drop — after the government on Wednesday confirmed the nation’s first case of H7N9 avian influenza.

China Airlines Ltd (CAL, 中華航空) shares fell 2.2 percent to close at NT$11.1, while those of EVA Airways Corp (EVA, 長榮航空) and TransAsia Airways Corp (TNA, 復興航空) declined 2.37 percent and 2.18 percent respectively to close at NT$16.5 and NT$13.45, Taiwan Stock Exchange data showed.

Shares of other tourism-related stocks also dropped in the session owing to fears of reduced interest in leisure and travel, while those related to influenza treatment and prevention rose on expectation of a better sales outlook.

CAL, the nation’s largest carrier, said it expects limited impact from the avian flu issue, while pinning its hopes on declining global crude oil prices boosting its profitability this quarter.

“This is definitely not like the SARS outbreak [in 2003] … as the situation in China has been gradually brought under control,” CAL chairman Sun Hung-hsiang (孫洪祥) told reporters after the company signed a code-sharing agreement with Transaero Airlines of Russia yesterday.

Sun said he has not seen the order cancellation rate in the passenger sector show a significant rise, with passenger load of cross-strait routes staying at an average of 80 percent this month.

“The H7N9 issue has had some impact on the company’s business, but not a big one so far,” Sun said.

However, the recent decline in global crude oil prices may generate some positive impact on the carrier this quarter, he added.

Prices of global jet fuel dropped to US$111 per barrel this month, from NT$130 in the January-to-February period, which is an indication that cost pressures for airlines have been easing, Sun said.

In addition, CAL aims to boost its sales in the second quarter by launching a code-sharing service with Transaero Airlines on the route between Taipei and Moscow via Bangkok that will begin on Wednesday next week.

CAL will operate the flights between Taipei and Bangkok, while Transaero will handle the Bangkok and Moscow route.

The carriers will run the route with two flights per week, but the frequency may be varied between two and seven flights per week due to seasonal adjustments, CAL said.

Dmitry Stolyarov, a deputy general director at Transaero, said the passenger load of the carrier’s route between Bangkok and Moscow averaged more than 80 percent last year.

The company expects to cooperate with CAL on other routes in the future, following Transaero’s plan to launch a route between Moscow and Hong Kong in the third quarter, Stolyarov added.

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