China Airlines Ltd (CAL, 中華航空), the nation’s biggest carrier, said yesterday that it was set to join SkyTeam Airline Alliance in the third quarter of next year, which is expected to boost the company’s passenger revenue by 2 percent a year because of the expanded flight network.
The Taipei-based airline, which signed a letter of intent with members of SkyTeam yesterday, would become the third Greater China airline in the Air France-KLM-led group, after China Southern Airlines Co (中國南方航空) and China Eastern Airlines Corp (中國東方航空), which expressed its intent to join SkyTeam in April.
“The passenger load factor could grow by between 2 and 3 percent, which translates to an increase of NT$1.6 billion [US$50.3 million] in passenger revenues a year based on current passenger revenues of NT$80 billion,” CAL president Sun Huang-hsiang (孫洪祥) said on the sidelines of the press conference.
In the first eight months of the year, CAL saw revenue (including passenger and cargo sales) increase 55.67 percent year-on-year to NT$92.33 billion, after the carrier posted last month’s revenue of NT$12.38 billion on Monday last week, up 45.21 percent from a year earlier.
Passenger revenue accounted for 55 percent of total revenue, according to the airline.
Sun said CAL would become the only SkyTeam carrier to provide flights from Taipei to Hong Kong and from Taipei to Tokyo, which would benefit the other members of the alliance.
SkyTeam said that the addition of China Airlines to the alliance would complement the well anchored position of China Southern, solidifying the presence of SkyTeam in the Greater China market, which continues to experience significant economic growth.
“In addition to the service provided by our existing members, China Airlines offers an extensive cross-strait operation, linking Taiwan to multiple major destinations in China,” SkyTeam chairman Leo van Wijk said at the signing ceremony in Taipei.
While saying that Taipei would serve as an alternative Asian hub with services to and from key business destinations in the Asia Pacific region, Wijk expressed concern that slower economic growth would impact the international aviation industry next year.
“Growth [next year] will not be as big as the past couple months,” he said.
SkyTeam, a group of 13 airlines led by Delta Air Lines Inc and Air France-KLM is one of the world’s three major airline alliances, providing approximately 13,000 flights to 169 countries on a daily basis.
After joining the global airline alliance, CAL would be able to share maintenance facilities with other member carriers, which would help the company maintain a more flexible flight schedule and reduce operating costs, CAL chairman Philip Wei (魏幸雄) said.
“Our strategic target is to continuously strengthen profitability and boost our competitiveness among international carriers,” Wei said, adding that he was pleased to see the deal come to fruition after a decade of discussion between the two parties.
Delta Air Lines yesterday welcomed CAL’s decision to join SkyTeam.
“China Airlines’ extensive network and growing hub in Taipei will complement Delta’s existing service to Taiwan and improve our customers’ access to destinations across one of the world’s fastest-growing regions,” Delta chief executive officer Richard Anderson said in an e-mailed statement.
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