Mon, Jun 10, 2013 - Page 14 News List

Airlines’ sales forecast to rise following weak period

By Amy Su  /  Staff reporter

The nation’s airlines may see an upturn in sales from this month, following the traditional weak period over the past two months when sales generated from the passenger business were relatively slow.

The nation’s three listed carriers — China Airlines Ltd (CAL, 中華航空), EVA Airways Corp (EVA, 長榮航空) and TransAsia Airways Corp (TNA, 復興航空) — are scheduled to release sales numbers for last month today.

In the current quarter, demand for cargo traffic has gradually recovered since April.

However, the sector faced various headwinds, such as the H7N9 avian influenza outbreak in China, as well as military action by North Korea, which made people reluctant to travel and dragged down the passenger business, CAL chairman Sun Hung-hsiang (孫洪祥) said on Friday.

CAL expects its passenger and cargo businesses to start recovering from this month, Sun said, citing strong seasonal demand during the summer vacation period, which may boost the company’s sales on US and European routes.

“The momentum may extend to the third quarter — the traditional peak period for the passenger business,” Sun told reporters on the sidelines of a press conference.

The cargo business will further improve in the period between next month and September, he added.

However, Sun did not specify if CAL would be able to return to profit in the second quarter.

He said the average price of aviation fuel was US$115 per barrel last month, lower than the full-year forecast of US$125 per barrel forecast by CAL in its budgeting for the year.

The decline in the cost of fuel could ease the company’s cost pressure, Sun said.

Capital Securities Corp (群益證券) said passenger sector sales would determine whether Taiwanese carriers’ were profitable this year, as the outlook for the cargo sector remained cloudy.

Accumulated sales for CAL — the nation’s largest carrier — totaled NT$44.47 billion (US$1.49 billion) in the first four months of the year, down 1.65 percent from a year ago, company data showed.

EVA, the nation’s second-largest carrier, also reported a drop in consolidated revenue in the first four months, down 0.28 percent from the previous year to NT$38.67 billion, while TNA saw its revenue in the first four months rise 21.33 percent from a year ago to NT$3.79 billion, statistics showed.

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