Sat, May 11, 2019 - Page 12 News List

Strike slashes 75% off China Airlines’ pre-tax profit in Q1

LINGERING PAIN:The strike ended in February, but revenue for March still fell 0.62 percent year-on-year as many passengers canceled their bookings

By Kao Shih-ching  /  Staff reporter

China Airlines Ltd’s (中華航空) pre-tax profit for the first quarter declined 75 percent year-on-year to NT$42.361 million (US$1.37 million) due to a strike by pilots during the Lunar New Year holiday, but the airline yesterday said that its profits are expected to recover in the second quarter.

The strike in February forced the airline to cancel 214 flights and it posted revenue of NT$12.43 billion that month, NT$700 million less than the NT$13.13 billion it posted a year earlier, corporate data showed.

Although the strike ended in February, China Airlines’ revenue for March still fell 0.62 percent year-on-year to NT$13.76 billion, as many passengers were afraid the strike would continue into that month and canceled their bookings, spokesman Jason Liu (劉朝洋) told the Taipei Times by telephone.

With 12.68 percent revenue growth in January offsetting the declines in February and March, the airline’s total revenue for the first quarter rose 2.07 percent year-on-year to NT$40.47 billion, the data showed.

However, China Airlines’ pre-tax profit declined due to increased operational costs, as it had to dispatch more pilots based on an agreement reached with the pilots’ union and compensate customers whose flights were delayed during the strike, it said.

“We did not do well in the first quarter due to the strike, but thankfully revenue for April has rebounded, reporting positive annual growth,” Liu said.

Despite that, the second quarter is usually the slow season, but the airline expects revenue to improve compared with the first quarter, Liu added.

Meanwhile, the airline’s board of directors on Wednesday decided that the firm would lease 17 Airbus A321neo aircraft to replace some of its older planes in 2021, Liu said.

The firm is also in negotiations with Airbus to buy 11 A321neo aircraft, with an option for five more, Liu said, adding that the firm could not yet reveal the cost of the purchase.

The new planes would be used on routes from Taiwan to other Asian nations and they would boost the airline’s fuel efficiency, he said.

The board of directors also agreed that subsidiary, low-cost carrier Tigerair Taiwan Ltd (台灣虎航), would pursue an initial public offering in the fourth quarter of this year, the airline said.

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