EVA Airways Corp (EVA, 長榮航空) president Chang Kuo-wei (張國煒) said yesterday that sentiment in the aviation cargo sector this year is the worst he has ever seen since he entered the market, evidence that demand would remain weak in the fourth quarter.
“Previously, demand from the US and Europe continued more or less until New Year’s Eve, even with a slowing global economy, but I have not seen any [demand] this year,” Chang told reporters after the air carrier held a press conference showcasing a special flight for Major League Baseball players, who are coming to Taiwan for a series of exhibition games next month.
Although increasing supply would be a factor driving up pricing pressure in the cargo sector, weak demand remains the biggest problem for the industry, Chang said.
Photo courtesy of EVA Airways Corp
Because of slowing economies in the US and Europe, EVA’s freight volume has shrunk quickly since August, Chang said, adding that demand may remain weak into next year.
The nation’s second-largest air carrier has a strategy to accelerate the pace in which it disposes of old aircraft and it is delaying orders for new planes to lower costs, Chang said.
“The company plans to sell three MD-11 freighters by the end of the year,” he said.
Chang said demand in the passenger sector remained strong this year, with the loading factor for European routes higher than expected at 85 percent following the eurozone approving visa-free entry for Taiwanese travelers.
The momentum on cross-strait routes also remains strong, mostly on demand from business clients, he added.
However, the passenger sector usually starts slowing six months after demand in the cargo sector drops, Chang said, adding that the company would carefully monitor the market.
EVA reported NT$8.26 billion (US$274.19 million) in revenues last month, down 7.19 percent from a year earlier and 12.13 percent lower than the previous month, the company’s data showed.
Revenues in the cargo sector fell 20.52 percent from a year earlier to NT$2.88 billion, while passenger revenue was up 5.28 percent year-on-year at NT$4.87 billion, the data showed.
The carrier’s shares rose 3.55 percent to NT$20.4 on the Taiwan Stock Exchange yesterday.
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