The airline sector might face some near-term uncertainties because of the outbreak of Middle East respiratory syndrome (MERS) in South Korea, even though it may still post strong profitability in the first half of this year on strong passenger demand, a top China Airlines Ltd (CAL, 中華航空) executive said yesterday.
The outbreak has dragged down CAL’s booking ratio on routes to destinations to that nation by about 5 percentage points, company data show.
CAL operates 42 weekly flights to South Korea — 28 on the Seoul route and 14 on the Busan route.
Photo: Wang Yi-hung, Taipei Times
The average booking ratio has fallen to between 75 and 80 percent since the outbreak was reported, compared with between 80 and 85 percent previously, the company’s data show.
“The company will carefully watch how the incident impacts the airline industry. We will step up cleanness and disinfection in our cabins,” CAL chairman Sun Hung-hsiang (孫洪祥) told a press conference held to announce a new Tainan-to-Osaka route, which is set to begin on Oct. 28.
In terms of sales and profitability, the outbreak has not had a significant impact on the company thus far, as the booking rate of other routes have maintained their original patterns, with many tour groups that had been headed to South Korea changing their destinations instead, Sun said.
Given the current relatively low fuel costs and strong demand in the passenger business, the airline might still see satisfying profitability in the second quarter, he said.
The nation’s largest airline posted a net profit of NT$1.85 billion (US$59.56 million) for the January-to-March period, or NT$0.35 per share, a significant improvement from the net loss of NT$2.73 billion, or NT$0.52 per share, it reported in the same period last year.
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