Mon, May 13, 2013 - Page 13 News List

Weak cargo sales ground airlines’ revenue

By Amy Su  /  Staff reporter

The nation’s two biggest airlines reported a decline in revenue last month from the same month a year ago due to the impact of weak demand in the cargo sector, even as they posted sequential growth in monthly passenger sales.

China Airlines Ltd (CAL, 中華航空), the nation’s largest carrier, posted NT$11.45 billion (US$384.23 million) in consolidated sales last month, down 1.85 percent from a year earlier and 2.14 percent from March, the company said in a filing to the Taiwan Stock Exchange.

Accumulated sales totaled NT$44.47 billion in the first four months, down 1.65 percent from a year ago, company data showed.

The carrier’s passenger sales totaled NT$7.53 billion last month, up 10.09 percent from a year earlier and 1.48 percent from a month earlier.

However, weak demand in the cargo sector continued last month, causing CAL’s cargo sales to fall 10.99 percent year-on-year and 14.36 percent month-on-month to NT$3.16 billion last month.

“It will be difficult for the air cargo sector to stage a significant rebound this year, since global sentiment continues to be weak and uncertain,” Capital Securities Corp (群益證券) said in a research note last week.

EVA Airways Corp (EVA, 長榮航空), the nation’s second-largest carrier, also reported a drop in consolidated revenue, shedding 3.35 percent to NT$9.95 billion last month compared with the same period a year earlier.

However, last month’s figure did represent a 4.02 percent from March, the company said in a stock exchange filling.

Sales in the first four months totaled NT$38.67 billion, down 0.28 percent year-on-year, EVA said.

EVAs passenger sales reached NT$5.34 billion last month, up 6.37 percent from a year earlier, but down 3.78 percent from a month earlier.

Revenue from its cargo business fell 10.4 percent year-on-year and 9.49 percent month-on-month to NT$2.67 billion last month.

However, smaller rival TransAsia Airways Corp (TNA, 復興航空) saw its consolidated revenue last month climb 27.64 percent from a year earlier and 7.33 percent from a month earlier to NT$1.06 billion.

Since the second half of last year, TNA has increased its focus on its regional passenger business, while also launching more international routes, a strategy that helped its revenue in the first four months rise 21.33 percent from a year ago to NT$3.79 billion.

Capital Securities said it expected the airline sector would see passenger sales bottom out this month and rebound from next month on the back of rising seasonal demand.

Sales of the three carriers are expected to reach their highest level of the year next quarter, the brokerage said.

In addition, the three carriers announced last week that they would begin flying new cross-strait routes next month, which is expected to help drive passenger sales during the summer, it said.

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