EVA upbeat on seasonal demand, fuel costs

By Amy Su  /  Staff reporter

Thu, Jul 04, 2013 - Page 13

EVA Airways Corp (EVA, 長榮航空) yesterday maintained an upbeat outlook for the company in the second half of this year, citing strong seasonal demand in its passenger business and falling fuel prices.

The company said it has seen a pickup in demand on cross-strait routes this quarter — the peak season for its passenger business — an indication that the impact of the H7N9 avian influenza outbreak is gradually fading, EVA president Austin Cheng (鄭傳義) said.

In addition, the nation’s second-largest airline expects volume growth on its Japanese routes to rise by 30 percent to 40 percent year-on-year in the third quarter on the back of strong seasonal demand, Cheng said.

“The sales on Japanese routes could be stunning during the third quarter,” Cheng said after a press conference co-hosted by EVA and Green & Safe (永豐餘生技) on in-flight food safety.

Cheng’s optimism also came from the expectation of a steady pace in the depreciation of the cost of aviation fuel in the second half of the year.

Aviation fuel prices are between US$116 and US$120 a barrel, lower than the US$130 a barrel recorded earlier this year, easing the cost burden on the airline sector, Cheng said.

In the long run, aviation fuel prices are expected to continue to slide following progress in the exploitation of shale gas in the US, which may further increase profitability for the airline sector, he added.

The company expects cargo revenue in the second half of the year to rise from six months earlier, as various electronics brands, such as Apple Inc, are ready to deliver new products to North America.

EVA posted NT$48.61 billion (US$1.6 billion) in revenue in the first five months of the year, up 0.72 percent from the previous year, a company filing to the stock exchange showed.

The company saw net losses total NT$917.02 million, or a loss per share of NT$0.28, in the first three months, compared with NT$714.5 million, or NT$0.22 per share, recorded a year earlier.