China Airlines Ltd (CAL, 中華航空), the nation’s largest air carrier, yesterday posted a net loss of NT$4.99 billion (US$153 million) for the first nine months of the year, 59.8 percent lower than the NT$12.41 billion loss a year earlier.
Subtracting a net loss of NT$2.37 billion in the first half from the nine-month figures, the carrier reported a loss of NT$2.62 billion in the third quarter, compared with a loss of NT$5.88 billion a year earlier.
The carrier was expected to make a net loss of NT$1.91 billion in the third quarter, Citigroup had estimated. CAL’s NT$1.56 billion in operating losses in the third quarter was also higher than Citigroup’s forecast of NT$1.1 billion.
“Oil prices could be the key factor in the discrepancy as third-quarter crude spot [prices] reached US$68 per barrel versus our assumption of US$62,” Citigroup analyst Peter Kurz said in a client note yesterday.
CAL’s third-quarter revenue fell 23 percent year-on-year to NT$25.9 billion and the first nine-months revenue dropped 27 percent year-on-year to NT$70.63 billion.
Kurz said the carrier’s cargo yield increased in the third quarter from the previous quarter because of a freight rate increase. He expected further freight rate increases in the current quarter, considering strong IT hardware shipments, which may help CAL’s cargo operations to break even this month.
“Should oil prices stabilize, we believe improving passenger and cargo operations will materially boost bottom-line performance,” he said.
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