Tue, Feb 12, 2019 - Page 12 News List

CAL shares plunge as losses mount

By Kao Shih-ching  /  Staff reporter

China Airlines Ltd (CAL, 中華航空) shares yesterday plummeted 3.32 percent amid mounting concern over potential losses due to an ongoing pilots’ strike.

The stock underperformed the TAIEX, which rose 0.72 percent in Taipei trading.

In a statement on its Web site, CAL said that 26 flights were canceled yesterday, the highest since the strike began on Friday.

As of press time last night, CAL said that 22 flights and three flights are to be canceled today and tomorrow respectively.

“It is difficult to estimate future losses as we make cancelation decisions on a rolling basis,” China Airlines spokesman Jason Liu (劉朝洋) told the Taipei Times by telephone, adding that “the cancelation of long-haul flights usually cause more losses.”

The carrier said that as of yesterday, it had lost about NT$105 million (US$3.41 million) in revenue after canceling 80 flights.

Following the Ministry of Transportation and Communications’ announcement about compensation plans for stranded tourists yesterday, the carrier might see losses increase, Liu said.

“Our personnel costs would at least increase by NT$500 million as the company has agreed to dispatch one more pilot when the flight time exceeds eight and 12 hours,” CAL assistant vice president Victor Fang (方承儒) said.

Compared with the CAL flight attendants’ strike in 2016, the pilots’ strike this time should cause less harm to the company as only one-tenth of flights were affected, Jih Sun Securities Investment Consulting Co (日盛投顧) said in a note yesterday.

Nonetheless, Jih Sun revised down its revenue forecast from NT$170.4 billion to NT$169.8 billion for this year and trimmed its net profit estimate from NT$5.67 billion to NT$4.9 billion.

Taishin Securities Investment Advisory Co (台新投顧) said that CAL’s first-quarter revenue might drop 6.5 percent quarterly due to the strike.

Revenue for the whole year should grow 3.24 percent from last year, it said.

On the broader market, local shares closed higher at 10,004.25 points, led by strong buying in select tech stocks, including contract chipmaker Taiwan Semiconductor Manufacturing Co (台積電), smartphone camera lens maker Largan Precision Co (大立光) and chip designer MediaTek Inc (聯發科).

Additional reporting by CNA

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