China Airlines Ltd (CAL, 中華航空) is expecting passenger flight capacity to grow 5 percent this year as oil prices and the global economy continue to stabilize.
“The market remains healthy with lower oil prices to continue benefiting the industry,” CAL chairman Sun Hung-hsiang (孫洪祥) said.
Global capacity for passenger flights is expected to rise 6.9 percent this year, compared with an estimated 6 percent increase in demand, Sun said, citing findings by the International Air Transport Association (IATA).
Capacity in Asia might advance 8.4 percent against an 8 percent growth in demand, he added.
Fuel prices last year averaged between US$60 and US$70 per barrel, or about 40 percent lower than 2014, Sun said, adding that lower oil prices had boosted passenger traffic and the company’s earnings.
As growth in cargo transport might decelerate to 3 percent this year, the company plans to focus on more promising drivers such as medical, aerospace, biotechnology and precision machinery shipments.
Regarding a potential drop in Taiwan-bound Chinese tourists, who account for about 15 percent of the company’s sales, Sun said CAL’s plans to purchase 50 additional single-aisle aircraft is not expected to change.
Sun said that 11 new aircraft are to be delivered this year, including five Boeing 737s and two Boeing 777s, as well as four Airbus 350s.
The first of the A350s is due in July, with the company to begin offering additional flights to Amsterdam, Rome and Vienna in December, the company said.
Passengers will be able to take direct flights to Amsterdam and Rome, while the number of weekly flights to major European destinations has been raised to 16, elevating CAL’s presence among Europe-bound consumers, the company said.
Meanwhile, Tigerair Taiwan (台灣虎航), a joint venture between CAL and Singapore’s Tiger Airways formed about 18 months ago, has taken 15.9 percent of Taiwan’s market for budget airlines to lead its peers, CAL president Chang Yu-hern (張有恆) said.
The budget airline is poised to see its 1 millionth passenger before the end of this month, Chang said.
CAL reported that consolidated sales last month declined 7.59 percent year-on-year to NT$11.88 billion (US$361.42 million) for the carrier’s cargo transport revenues.
In particular, CAL’s cargo transport sales last month fell 39.98 percent annually to NT$2.11 billion, dragged down by reduced working days during the Lunar New Year holidays and a slump in trade in Asia, the company said.
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