Sat, May 17, 2014 - Page 13 News List

TransAsia Airways posts net profit as others remain in red

By Amy Su  /  Staff reporter

TransAsia Airways Corp (TNA, 復興航空) made a profit last quarter, due to route expansion and lower fuel costs than its peers, a company executive said yesterday.

That made TNA the only locally listed carrier to post a quarterly profit.

TNA, which mainly operates regional passenger routes in Asia, earned NT$49.62 million (US$ 1.6 million), or NT$0.09 per share, in the first three months of the year, reversing losses of NT$129.46 million, or NT$0.23 per share, a year earlier, according to its filing with the Taiwan Stock Exchange.

“The firm is able to sustain its profit momentum even under the relatively high fuel prices in the first quarter as we do not have cargo business, which has been a drag for airlines for years,” TNA chairman Vincent Lin (林明昇) told reporters on Tuesday.

Without cargo business, TNA has lower fuel costs than its rivals, Lin said.

TNA expects the growth momentum to extend into later this year as its regional route expansion over the past two years has started bearing fruit, Lin said.

The new routes have been one of the major revenue and profit drivers in the first three months, Lin added.

In comparison, China Airlines Ltd (CAL, 中華航空) and EVA Airways Corp (EVA, 長榮航空) posted quarterly losses for the January-to-March period.

CAL, the nation’s largest carrier, posted a widened loss of NT$2.73 billion, or NT$0.52 per share, for the first quarter, compared with net losses of NT$1.11 billion, or NT$0.21 per share, recorded a year ago, the company said in its stock exchange filing.

Last quarter’s losses were the worst for CAL since the third quarter of 2009, as the weak air cargo business continued to drag the airliner’s financial performance.

A payment of US$90 million to settle a price-fixing lawsuit on cargo shipments also added to the losses, CAL said.

EVA, Taiwan’s second-largest airline, saw quarterly losses improve slightly during the January-to-March period to NT$909.83 million, or NT$0.28 per share, from losses of NT$917.02 million, or NT$0.28 per share, a year ago, company statistics showed.

Capital Securities Corp (群益證券) said the passenger business will remain the major driver for Taiwan’s airline sector this and next quarter.

However, the continuous capacity increase of cross-strait routes and the launch of low-cost carriers in the second half of this year might keep average ticket prices relatively low, Capital Securities said.

That will be a risk for local airliners, it added.

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