China Airlines Ltd (CAL, 中華航空) yesterday reported a net profit of NT$420 million (US$14 million) for last quarter, down 86 percent from NT$3.07 billion a quarter earlier, although an improvement from a net loss of NT$342 million a year earlier.
Earnings per share were NT$0.07 last quarter, the airline said in a statement.
CAL attributed the quarterly decrease in profit to the reduction in air cargo demand due to slowing global economic growth, surging inflation and interest rate hikes.
Photo courtesy of China Airlines Ltd
The increase in aviation fuel prices amid the Russia-Ukraine war also weighed on the company’s bottom line, it said.
The airline’s passenger revenue gained 37 percent quarter-on-quarter thanks to relaxed border controls, with sales to North America, Europe and Southeast Asia rising the most, which helped offset its softening air cargo business.
Overall, CAL said its operations faced more pressure last quarter than in the first quarter.
For the first six months of the year, net profit totaled NT$3.49 billion, compared with net losses of NT$1.36 billion a year earlier.
Gross margin improved to 11 percent in the six-month period, from 7.87 percent a year earlier, company data showed.
Earnings per share were NT$0.58 in the first half of the year, compared with losses per share of NT$0.25 a year earlier, the data showed.
For the second half of the year, CAL said it expects better demand for both passenger and air cargo businesses.
The airline plans to increase the number of weekly flights by 30 percent in the fourth quarter to above 200 to meet rising demand for air travel, it said.
However, as oil prices remain high, CAL said it would carefully plan its flight schedules and adjust them flexibly.
Demand for air cargo should remain robust, especially from the semiconductor machinery, e-commerce and consumer electronics sectors, it said.
However, air freight rates might slide as more passenger flights return to the sky, increasing overall cargo capacity, it said.
Shipping demand from the Asian and US markets are forecast to be particularly strong, it added.
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