In preparation for the expected easing of a ban on direct links with China, Taiwan's China Airlines (
Those options -- to buy four Boeing 747-400 cargo jets, two 747-400 passenger planes and another Airbus A340-300 -- no longer fit with the company's plan to be a transportation link across the Strait.
"The Airbus and Boeing jets are suited for routes between Taiwan and major Chinese cities such as Shanghai and Beijing," Chang said. "We must be ready for flights to major Chinese cities when the government gives us the green light," said Senior Vice President James Chang (張良士) at a press meeting in Taipei.
The company is looking at the Airbus 330 and Boeing 777, he added.
The company also admitted that its main owner has decided to scrap a planned share sale because the company's stock price is too low.
The China Aviation Development Foundation, which has been trying to sell its 71-percent stake in China Airlines since October 1998, has decided to scrap the plan because it doesn't want to sell for less than NT$20 per share.
The company's shares fell 0.5 percent to close at NT$18.3 yesterday, bringing the drop to 12 percent this year.
The foundation in April last year decided not to renew an advisory contract with US investment bank Salomon Smith Barney.
Salomon had been selected in April 1999 to help find buyers for half the 71-percent stake in China Airlines.
The foundation originally wanted NT$32 a share for its stake, a hefty premium to a share price that has traded at an average of NT$19.2 in the past two years and reached a high of NT$26.4 in the same period.
In related news, China Airlines' first-quarter pretax profits rose 92 percent, hitting NT$720 million, due mainly to an increase in passengers and cargo, said the company.
China Airlines set a target of a 10.2 percent sales increase for all of 2001 as it expands capacity and routes.
The company is in the process of planning new flights to Frankfurt and increased flight frequency to both New York and Bangkok and introduce five A340-300 passenger jets and four B747-400 freighters.
The new passenger jets and freighters will replace four MD-11s and one B747-200F.
"With the addition of the new planes, the average age of China Airlines' fleet will drop to six years, making it one of the youngest in the world," said Christine Tsung (
Tsung also predicted that 2001 earnings of the parent company are expected to exceed company forecasts.
"Passenger revenue is seen better than forecast as load factors increase. We have saved some interest costs, and oil prices are not rising," Tsung said.
The company has forecast that in 2001 sales will rise by 10.2 percent to NT$79.07 billion.
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