CAL forecasts passenger business to grow steadily

By Amy Su  /  Staff reporter

Fri, Mar 08, 2013 - Page 13

The aviation industry could see business fare better this year than last year, if oil prices remain at the same level as last year, according to the new chairman of China Airlines Ltd (CAL, 中華航空), the nation’s largest carrier.

“We maintain a cautiously optimistic view [for the airline industry] this year,” Sun Hung-hsiang (孫洪祥) told a media briefing after he was promoted to the post yesterday, which was left vacant by former chaiman Chang Chia-juch (張家祝), who became Minister of Economic Affairs on Feb. 18.

The trend in global crude oil prices remained the key factor for the carrier’s profitability this year, as its fuel costs usually account for about 45 percent of total costs, said Sun, who is also CAL’s president.

Sun said the company’s passenger business would grow steadily and forecast that Taiwan’s aviation passenger traffic would show an 8.5 percent increase this year, higher than the 5.2 percent growth in the Asia-Pacific region forecast by the International Air Transport Association (IATA).

However, the outlook for the cargo business remains uncertain, he said.

“We had expected a clear and positive sign [for cargo business] for last month or this month, but the prospects remain unclear,” Sun said.

The cargo prospects may improve in the second quarter following the launch of various consumer electronic devices, he added.

Growth for the cargo business in Taiwan this year may be in line with IATA’s 2.1 percent growth forecast for the Asia-Pacific region, Sun said.

CAL is scheduled to begin its fleet replacement this year and continue through 2020, with its newly ordered planes — including Airbus SAS’ 330 series and 350 series, as well as Boeing Co’s 737-800 and 777 series aircraft — expected to be delivered in succession.

The carrier is also set to pick up a narrow-body aircraft for the next generation by the end of this year, he said.

Meanwhile, following the flourish of low-cost carriers (LCCs), stepping into this market is only “a matter of time” for CAL, Sun said, adding that the company would take serious consideration into the issue before making any decision.

CAL’s consolidated revenue inched up 0.28 percent last year to NT$149.89 billion (US$5.05 billion) from a year ago, while net income totaled NT$384.31 million, or NT$0.08 per share, in the first three quarters of last year, compared with NT$214.15 million, or NT$0.05 per share, a year earlier.