Sat, Oct 12, 2013 - Page 13 News List

China Airlines cautious, citing fuel costs

UP HILL:The airline’s target is still to post a profit by the end of this year, meaning earnings need to be much stronger next quarter to counter a poor first half

By Amy Su  /  Staff reporter

A traditional Japanese dance troupe performs at Taipei International Airport (Songshan) yesterday to celebrate the opening of China Airlines’ first chartered flight between the airport and Matsuyama Airport in Japan. The names of the two airports share the same Chinese characters.

Photo: Chu Pei-hsiung, Taipei Times

China Airlines Ltd (CAL, 中華航空) hopes steady passenger sales and a rebounding cargo business this quarter will help move it into the black.

Meanwhile, the nation’s largest carrier is also continuing its feasibility studies into establishing a low-cost carrier (LCC), either by itself or in cooperation with other partners.

The results of the research are expected to be out by the end of this year.

“We have felt some momentum for the cargo business [this quarter], following the launch of various new electronics products,” CAL chairman Sun Hung-hsiang (孫洪祥) told a media briefing.

The carrier held a ceremony yesterday for its first chartered flight between Taipei and Ehime, Japan, involving a traditional Japanese dance troupe.

The airline has embraced strong business in the third quarter, with revenue totaling NT$37.37 billion (US$1.27 billion), up 5.36 percent from the previous quarters, the company said in a filing to the Taiwan Stock Exchange.

However, Sun maintained a cautious attitude toward the company’s profitability for the whole of this year, citing uncertainties about fuel costs, which CAL says generally account for about 40 percent of its overall costs.

China Airlines reported net losses of NT$1.22 billion, or NT$0.24 a share, in the first half of this year, according to the

company’s data.

Sun said the company is still aiming to record a profit this year. He said the company was hopeful of making target, citing steady passenger business and an expected rebound in cargo sales this quarter, but only if global crude oil prices maintain unchanged from now on.

CAL posted NT$11.47 billion in consolidated sales last month, 2.63 percent higher than in the same month a year earlier, but 11.97 percent lower than the level recorded in August, the company said.

In the first nine months of the year, consolidated sales stood at NT$104.6 billion, down 1.31 percent from a year earlier, statistics showed.

Meanwhile, the carrier will make a decision about launching operations for a LCC by the end of this year, Sun said, adding that CAL is keeping a “positive” attitude toward the issue as LCCs have become a trend over the past few years.

EVA Airways Corp (EVA, 長榮航空), the nation’s second-largest carrier, saw consolidated sales last month amount to NT$10.27 billion , up 6.02 percent from a year earlier, but down 12.15 percent from a month earlier impacted by declining seasonal demand.

For the first nine months of the year, consolidated sales totaled NT$92.62 billion, which represented an increase of 2.35 percent from the same period last year, company data showed.

In addition, TransAsia Airways Corp (TNA, 復興航空), which focuses on regional passenger business in Asia, saw its consolidated sales reach NT$1.06 billion last month, up 34.73 percent from a year earlier, company data showed.

Consolidated revenue in the first nine months amounted to NT$9.24 billion, up 23.03 percent from a year earlier, statistics showed.

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