Passenger airfares are likely to rise in the next few months, as aviation fuel prices and operating costs continue to increase sharply, EVA Airways Corp (長榮航空) said yesterday.
While demand for air travel is expected to grow as COVID-19 restrictions are eased worldwide, airlines are facing higher operating costs, including ground handling rates, amid rising inflation, EVA president Clay Sun (孫嘉明) said at the company’s annual general meeting in Taipei.
Aviation fuel accounts for about 30 percent of airlines’ operating costs, Sun said, adding that fuel prices are now hovering at about US$120 to US$150 per barrel.
Photo courtesy of EVA Airways Corp via CNA
Airlines are thus likely to raise or add fuel surcharges to their ticket prices to offset growing operating costs, he said.
On the air cargo front, there is some good news, as several electronic manufacturing companies in Shanghai have restarted production after months of tight lockdown due to COVID-19 restrictions, Sun said.
As Shanghai moves to ease its COVID-19 curbs, supply chain disruptions are likely to improve, which would be a boon to the air cargo industry, he said.
EVA has been using 17 of its passenger jets as cargo planes during the pandemic, and the airline is expected to take delivery of two new Boeing Co 787 Dreamliner passenger jets in the fourth quarter, he said.
Amid growing demand for air travel as countries around the world ease their COVID-19 restrictions, EVA will resume passenger flights in August between Bangkok and London, and Amsterdam and Vienna, Sun said, adding that the Bangkok-London flights are already 85 percent booked.
The airline also plans to restart its passenger flights from Taiwan to the US cities of Houston and Chicago in August and offer more frequent services to North America in general, Sun said.
In early November, EVA Air is aiming to open new passenger routes between Taiwan and some European destinations, in anticipation of Taiwan lifting some of its COVID-19 border restrictions around August, he said.
The new European routes would include two weekly flights to Milan, Italy, and four to Munich, Germany, Sun said.
The company is expected to show better results in the second half of the year than in the first half, and plans to issue a cash dividend of NT$0.6 per share this year, Sun said.
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