CAL staying positive as it launches alliance

FLYING START::After it joined forces with three Chinese carriers, CAL’s president was upbeat on plans to increase the firm’s cross-strait services

By Amy Su  /  Staff reporter

Fri, Jan 04, 2013 - Page 13

China Airlines Ltd (CAL, 中華航空), the nation’s largest carrier, maintained an upbeat outlook on its sales and profitability this year on the back of a mild global economic recovery and strong demand on regional routes in Asia, a company official said yesterday.

“We hold a relatively optimistic view for the year of 2013 amid a U-shaped mild-paced economic recovery,” CAL president Sun Hung-hsiang (孫洪祥) told reporters yesterday following the signing ceremony for a deal under which CAL is forming an alliance with three Chinese carriers

Sun said he expected the company’s passenger business to stay strong this year, with regional routes in Asia major drivers.

Meanwhile, the carrier expects to launch more routes to Japan and China this year to boost sales in the passenger sector, he added.

As for cargo business, Sun said that the sector was bottoming out, an indication that CAL’s cargo business might not fare worse this year than last year.

Global crude oil prices — the major factor affecting a carrier’s operating costs — are also not expected to increase substantially this year, Sun said.

However, Sun said that oil prices may still fluctuate this year, with the situation in the Middle East likely to be a major area of uncertainty.

Following its forming an alliance with China Eastern Airlines Corp (中國東方航空), China Southern Airlines Co (中國南方航空) and Xiamen Airlines (廈門航空), CAL plans to expand its market share for cross-strait routes this year by offering more flights and destinations to China.

The four airlines will be cooperating on code-sharing services, providing more flight choices to passengers, Sun added.

CAL has about 28 percent of market share in cross-strait routes, company data showed.

Sun said the alliance could offer more services in the future, following the platform established by the four airlines maturing.

CAL posted NT$121.26 billion (US$4.17 billion) in sales for the first 11 months of the year, up 0.38 percent from a year earlier, the airline said in its stock exchange filing.

The company’s shares stayed flat at NT$12.1 yesterday, but dropped 9.09 percent for the whole of last year, stock exchange data showed.