China Airlines Sees 2009 Break Even
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Loss-making Taiwanese carrier China Airlines said Wednesday it expects to break even this year following consecutive quarterly losses, helped by an improvement in its cargo figures and closer cross-strait ties.
The airline will also set up a branch in China, the first by a Taiwanese airline, as ties warm between the two political rivals and ahead of the introduction of regular direct cross-strait flights in August this year.
"Our cargo figures were extremely weak last year, and if there's a rebound there we should be able to break even," China Airlines spokesman Bruce Chen said on the sidelines of a company event.
"Direct flights are also helping, and we'll have a branch in Beijing very soon."
All flights between Taiwan and China previously had to stop at a third city, usually Hong Kong, but the two sides have grown closer economically under the year-old administration of Taiwan's President Ma Ying-jeou.
China Airlines recorded a loss of TWD$2.96 billion (USD$90 million) in the first quarter of this year, hit by a plunge in international travel amid the global economic slowdown.
Chen also said he hoped jet fuel prices could remain at current levels after a difficult 2008, when airlines around the world were hit by surging oil prices, forcing them to suffer massive losses or impose hefty fuel surcharges.
Chen's comments stand in stark contrast to larger Asian rivals such as Singapore Airlines and Cathay Pacific, who are suffering from declining load factors and falling profits, and have been wary of predicting any turnaround.
It also comes amid a rally in Taiwan's stock market, where investors in the island's many technology firms have been betting that closer ties with China will be good for business.
However, investors have been less bullish on Taiwan's airline industry so far. Shares of China Airlines are up 15 percent this year and its smaller rival EVA Airways advanced about 18 percent during the same period, compared to a 46 percent gain in the benchmark TAIEX share index.
The International Air Transport Association said in late June the world's airlines lost more than USD$3 billion in the first quarter of this year.
