Due to the nation’s relatively small market, Evergreen Group (長榮集團) is considering consolidating its two carriers, Uni Air (立榮航空) and EVA Airways Corp (EVA, 長榮航空), in a bid to concentrate on the development of a single brand with strong customer acceptance.
However, the group may not adopt the plan until the Ministry of Transportation and Communications changes its regulations governing the allocation of air routes.
“Given the scale of the Taiwanese market, it would be enough for the nation to only have two airlines,” EVA chairman Chang Kuo-wei (張國煒) said during the group’s annual gathering with the media yesterday.
Chang said the group is evaluating a plan to merge Uni Air — which mainly operates domestic and cross-strait routes — with EVA, the nation’s second-largest carrier, which would help the group focus on the management of a single brand, especially with regards to flight safety issues.
However, the government’s regulations governing the allocation of air routes — the number of airlines being a key factor deciding the number of routes a group may receive instead of a carrier’s scale — is a stumbling block.
The rule may hurt both EVA and Uni Air after the consolidation, leading Chang to call on the government to change the regulations.
EVA will continue to expand its number of routes, with a new service between Taipei and Houston launching in June being the key progress this year, Chang said.
Evergreen Group vice chairman Bronson Hsieh (謝志堅) said a global economic recovery this year, led by the US, may benefit both EVA and Evergreen Marine Corp (長榮海運) — the nation’s largest container shipping company — as routes to the US have been the major business focus of the two firms.
The reasonable price of crude oil, which has shown a significant decline since the second half of last year, would be the other driver for the two companies this year, Hsieh said.
Citing the opinions of various industry experts, Hsieh said it may be “nearly impossible” for global crude oil prices to climb back to US$100 a barrel, with an average price of between US$55 and US$65 a barrel likely to be a reasonable level this year if there are no significant political or economic upheavals.
Hsieh’s remarks were in line with market analysts, who are generally forecasting that the group could generate more than NT$20 billion (US$634.86 million) in income this year on the back of the positive drivers Hsieh mentioned.
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