Eva Airways Corp's (長榮航空) and China Airlines' (中華航空) shares fell by their daily limit for a second day after EVA Airways reported a first-half loss and predicted a full-year loss because of falling demand amid slowing economies.
EVA Air shares dropped as much as NT$0.85, or 6.6 percent, to NT$11.95, adding to a 6.9 percent drop yesterday. China Airlines shares fell as much as NT$1.1, or 6.5 percent, to NT$15.90, extending yesterday's 6.6 percent drop.
``We were previously expecting a bit more of a recovery in the second half, but now it looks like this softness is going to continue,'' said Philip Wickham, an analyst at ING Barings Ltd in Hong Kong.
Taiwan's two largest airlines are suffering from falling shipments as Taiwan's economy slows. The economy shrank 2.4 percent in the second quarter from a year ago as exports of computers, cell phones and semiconductors fell.
Second-quarter growth in the US, Taiwan's biggest market, was the slowest in more than eight years.
Eva Air on Friday reported a loss of NT$2.52 billion (US$73 million) in the six months to June, compared with net income of NT$1.32 billion in the year-earlier half.
The airline also said it expects a full-year 2001 loss of NT$3.35 billion because of slowing business. Last month, China Airlines said profit in the first half fell 21 percent.
The shares also fell partly on disappointment that Taiwan's plans to open its CKS international airport near Taipei and Hsiaokang International Airport (
EVA Air's loss forecast prompted analysts to cut their earnings forecasts and recommendations on the stock.
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