China Airlines Ltd (CAL, 中華航空) yesterday said it expects stable growth this year as ongoing fleet upgrades help offset rising fuel costs.
The company, which has since 2016 taken delivery of 14 Airbus SE A350-900 aircraft to replace its older A340-300 jets, expects to benefit from the improved fuel efficiency and passenger load factors of the new aircraft to limit the effects on gross margin, CAL chairman Ho Nuan-hsuan (何煖軒) said at the company’s annual general meeting.
Ho said CAL is assessing Airbus A320neo and Boeing Co 737 MAX aircraft to replace its fleet of 737-800 planes.
CAL would gradually phase out its fleet of 737-800 aircraft, with the lost passenger capacity to be made up by leased aircraft, he said.
As A330-300 aircraft are crucial in long-haul flights, the company is still planning the aircraft’s retirement schedule, Ho added.
CAL would also continue to support the government’s New Southbound Policy and develop Taiwan as a destination for Muslim travelers from across Southeast Asia, Ho said.
However, the picture is less rosy for air cargo, with global demand growth forecast to slow from last year’s 9.3 percent to about 4.5 percent this year, Ho said, citing estimates by the International Air Transport Association.
In addition, as more airlines across the globe take delivery of newer wide-body aircraft with belly cargo holds, the increased capacity in the market could lead to oversupply, he said.
Shareholders yesterday approved a plan to distribute a cash dividend of NT$0.218 per share.
In related news, EVA Airways Corp (長榮航空) on Friday last week said it would remain profitable as long as oil prices stay between US$70 and US$80 per barrel.
The company posted a net profit of NT$1.42 billion in the first quarter of this year, compared with a net loss a year earlier, despite Brent crude prices soaring to US$79 per barrel, it said at its shareholders’ meeting.
Passenger transport is expected to rise 2.6 percent annually this year, EVA said, adding that sales contribution from premium flights rose 15 percent annually during the first five months of the year.
EVA shareholders approved a plan to distribute a cash dividend of NT$0.7 per share.
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