China Airlines' revenues reach record high

China Airlines Co (華航) said yesterday that a global economic recovery and greater operational efficiency pushed its revenue to a record high in the three months to March.

Sales in the first quarter rose 5.9 percent from a year earlier to NT$18.24 billion, the company said in a statement.

The company's pretax profit rose 11.1 percent to NT$800 million, it added.

The airline said it saw room to raise this year's earnings forecast of NT$1.41 billion but uncertainties remained due to competition in key routes, such as those linking Taipei with Japan and Hong Kong, vice president James Chang said.

China Airlines said it expected sales to edge down 2.3 percent, or between NT$950 million and NT$1.0 billion on the lucrative Taipei-Hong Kong route this year due to greater competition following the expected signing of a new Taiwan-Hong Kong aviation pact this year.

The new deal is expected to allow rivals EVA Airways Corp (長榮航空) of Taiwan and Hong Kong-based Dragon Air (港龍航空) to introduce more flights on what is known as the "golden route." Most passenger and air-freight traffic between Taiwan and China goes through Hong Kong because of the ban on direct links.

To offset this expected fall in revenue, China Airlines plans to expand its services linking Hong Kong to the US, Canada, Japan and other major destinations. It is hoped this will generate an extra NT$550 million in sales, it said.

The company also anticipated sales would fall by NT$400 million to NT$450 million this year on the Taipei-Tokyo route due to greater competition. The company also plans to shifts its flights to Narita Airport from Haneda Airport from tomorrow, it added.

In related news, two of Taiwan's smaller airlines announced yesterday that they will launch charter flights to North and South Korea and schedule flights to Laos this month and next month.

Mandarin Airlines (華信航空), a subsidiary of China Airlines, will launch twice-a-week charter flights to North Korea from May 11 to June 30.

"We will use a Boeing 737-800 jet to fly Taiwan tourists to attend the Arirang Festival," Mandarin Airlines spokeswoman Hsiao Hsiao-ling (蕭曉玲) said.

North Korea will hold the Arirang Festival from April 29 to June 29 to mark the 90th birthday of North Korea's late founder Kim Il-sung (金日成).

Pyongyang expects to attract 1,000 foreign visitors a day during the festival.

Mandarin Airlines will also launch regular flights to Vientiane, the capital of Laos, on Monday, Hsiao said.

Meanwhile, Far East Air Transport Corp (遠東航空) will launch charter flights to South Korea starting next month.

The charter flight to South Korea indicates a partial resumption of air links between Taiwan and South Korea. Flights stopped in 1992 when Seoul switched diplomatic recognition to Beijing.

Taiwan residents felt betrayed because South Korea did not inform before hand of its decision to recognize Beijing. Even after China had announced it was negotiating opening ties with Seoul, South Korea still denied the news. At that time, Taipei residents pelted South Korea's embassy with eggs and Taiwan cut economic ties and air links with South Korea.

The two sides exchanged representative offices in 1993 and are still negotiating a formal resumption of air links.