China Airlines Ltd (CAL, 中華航空) yesterday said it expects to end this year in the black and recover from accumulated losses during the first half, helped by the peak season in the final quarter.
“We are upbeat on the third-quarter results; earnings could reach about NT$3 billion [US$99.1 million],” CAL chairman Ho Nuan-hsuan (何煖軒) said on the sidelines at an Association of Asia Pacific Airlines (AAPA) conference in Taipei.
The projected earnings for the last quarter represented a 70.45 percent growth from the net profit of NT$1.76 billion registered in the April-to-June quarter.
Ho said that the company’s NT$1.76 billion earnings in the second quarter would have been much higher if not for asset impairment charges incurred, as the company is selling aircraft as part of its fleet replacement plan.
The company reported a net loss of NT$1.9 billion at the end of the first half of the year after posting a net loss of NT$3.76 billion in the first quarter. Losses per share were NT$0.37 in the first six months.
Load factors have been favorable this month, in line with high-season expectations in the fourth quarter, Ho said.
Meanwhile, the carrier in December is to launch a service to London, and another to Ontario International Airport in California, Ho said, adding that it is in talks with Air France about adding flights to European cities.
CAL shares rose 0.82 percent to close at NT$12.3 in Taipei trading yesterday, outperforming the TAIEX, which gained 0.06 percent.
The AAPA conference brought 16 member airlines across Asia to Taipei, Ho said.
CAL has made great strides in its fleet replacement plan, adding 10 new Boeing 777 and 14 Airbus A350-900 planes since September last year, Ho added.
The conference also bolstered CAL’s ties with aircraft manufacturers, which it had formed partnerships with to help develop its own maintenance capabilities, he said.
In light of rising competition in the sector, Asian airlines are working toward closer collaboration with their peers to ensure sustainable profitability across the region.
International Air Transport Association head Alexandre de Juniac said the Asia-Pacific region is facing challenges amid growing demand for air travel, and there is room for improvement in airport upgrades and air traffic management.
“We are headed for a major infrastructure crisis,” De Juniac said at the conference. “In many ways the Asia-Pacific region is ahead of the game, with major hubs having robust expansion plans, but there are challenges.”
Bangkok, Manila and Jakarta are among the airports that need major upgrades, while China’s air traffic management is struggling to cope with growth, De Juniac said.
China has not yet been able to replicate its success in building airports to come up with solutions on air traffic management, he added.
Additional reporting by CNA
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