EVA Airways Corp (長榮航空) yesterday signed a NT$50 billion (US$1.6 billion) deal with Boeing Co to procure five new freight aircraft.
The Taiwanese carrier is expected to receive the first of five Boeing 777 Freighters in October 2017 and have all five in operation by September 2019, EVA Air chairman Chang Kuo-wei (張國煒) said.
The 777 Freighter uses about 20 percent less fuel than the older Boeing 747-400 cargo aircraft in the company’s fleet, Chang said.
He said that it is crucial for the company to modernize its fleet, as the cargo sector is beset by dwindling margins and declining transport volume.
“The Boeing 747-400 is no longer the ideal choice, as there is no longer enough demand to fill it to capacity on each flight,” Chang said, adding that the 777 Freighter’s smaller capacity of 85 to 90 tonnes affords much more flexibility.
The new aircraft also shares many characteristics with other 777 series aircraft in EVA Air’s fleet, which will allow pilots to easily switch between flying cargo and passenger aircraft and simplify maintenance, he said.
EVA Air also plans to purchase 24 to 26 passenger aircraft in 2018 or 2019, which is expected to be one of the carrier’s largest procurement bids ever, Chang said.
The company is considering the Boeing 787 and the Airbus A350, and has urged Boeing senior vice president John Wojick to provide a more “friendly” price in the upcoming purchase, he said.
In light of the carrier’s lengthy history with Boeing aircraft powered by General Electric Co (GE) engines, Chang said that the 787 would be the ideal choice, as the A350 is powered by Rolls-Royce PLC engines, which would complicate maintenance.
Growth prospects are expected to be constrained for its maintenance business, he said.
“In terms of engine maintenance, many manufacturers are requiring clients to use their own first-party services or risk having their warranties voided, leaving other operators out of the picture,” Chang said.
Evergreen Aviation Precision Corp (EGAP, 長榮航與精密), an affiliated business of EVA Airways, has started shipments of its rigid cargo barriers for Boeing freight aircraft and has delivered 11 units since December last year as part of a contract that runs through 2019, he said.
GE awarded EGAP a six-year contract to supply 45 parts for the US company’s next-generation LEAP (leading-edge aviation propulsion) engine, he added.
Chang said the Taiwanese firm is striving to establish a vertically integrated aviation supply chain, aiming to tap into the market for aircraft parts assembly.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
ALL ABOUT STRATEGY: The company is optimistic, saying that its gross margin should increase year-on-year, but it is scaling back on its plans to expand capacity Quang Viet Enterprise Co (QVE, 廣越), which makes down jackets and garments for sportswear and outdoor brands including Adidas AG, yesterday said that revenue might drop 5 to 10 percent annually this year as some customers trimmed orders in response to the COVID-19 pandemic. That would mark its first revenue decline since 2016. Quang Viet posted record-high revenue of NT$16.26 billion (US$537.45 million) last year, up 22 percent from 2018. Down jackets made up 40 percent of it revenue last year. North Face Inc and Patagonia Inc are this year likely to reduce orders by 20 to 30 percent from a
The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday. The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said. With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca