China Airlines, Eva Air To Cut Flights On Fuel Costs

[LaoPo]

China Airlines, EVA Air to Cut Flights on Fuel Costs

June 9 (Bloomberg) -- China Airlines and EVA Airways Corp., Taiwan's largest carriers, will cut as much as 10 percent of flights as they struggle to cope with jet-fuel prices that have doubled in a year.

China Airlines is axing 100 passenger flights a month, mainly to the U.S. and Asia, spokesman Bruce Chen said by phone today. EVA Air will cancel about 5 percent of its passenger services from Sept. 1 to Dec. 1, said spokeswoman Katherine Ko.

The airlines follow Qantas Airways Ltd., China Southern Airlines Co. and other Asia-Pacific carriers in announcing cuts after surcharges failed to cover surging jet-fuel costs. Higher ticket prices have also helped damp travel demand, with Taiwanese residents making 0.8 percent fewer flights overseas in the first quarter than a year earlier.

The Taiwanese carriers ``lose money from every flight they make,'' said Bruce Tsao, an analyst at Capital Securities Corp. in Taipei. ``They don't have any choice'' except making cuts. He rates both Taipei-based China Airlines and EVA Air as ``hold.''

China Airlines fell 6 percent to close at NT$14.80 in Taipei trading, compared with a 1.8 percent decline in the benchmark Taiex index. Smaller rival EVA Airways declined 5 percent to NT$16.25.

China Airlines will axe 50 all-cargo flights a month as well as making cuts in areas including marketing, said Chen. The carrier presently has no plans to reduce salaries or to trim flights to Europe, where earnings are better, he added.

`Control Our Losses'

``We're hoping to control our losses,'' said Chen. The reduced number of flights ``will continue until the company turns a profit or oil costs become relatively favorable.''

China Airlines' loss widened to NT$2.97 billion ($98 million) in the first quarter, from NT$806 million a year earlier. EVA Air's loss was NT$2.29 billion, compared with NT$331 million a year earlier.

EVA Air will cut services to Amsterdam, Los Angeles, and Ho Chi Minh City, Ko said. The airline, based in northern Taiwan's Taoyuan, is yet to decide whether the flights will resume after Dec. 1, she added.

Taiwanese carriers have raised surcharges on international routes three times this year. Taipei-based Far Eastern Air Transport Corp. halted flights in May due to a lack of funds.

At least seven major Asia-Pacific airlines have announced plans to cut flights in the past two weeks, because of surging fuel costs. Qantas and Air New Zealand Ltd. both said last week they will trim international services. China Southern, the nation's biggest airline, is planning similar moves.

Airlines across the region dropped after the price of oil jumped the most ever in dollar terms on June 6, climbing $10.75, or 8.4 percent, to $138.54 a barrel. That boosted the cost of jet fuel, most Asian airlines' biggest expense.

Carriers worldwide may report a combined loss of as much as $6.1 billion this year, the worst since 2003, according to the International Air Transport Association.

---Bloomberg

LaoPo

[crudy21]

Great news, i hope after the appaling way i was treated by China Airlines on my LAST flight with them in February that they go bust with immediate effect!

[Jimjim]

Great news, i hope after the appaling way i was treated by China Airlines on my LAST flight with them in February that they go bust with immediate effect!

Do explain.

[vagabond48]

Great news, i hope after the appaling way i was treated by China Airlines on my LAST flight with them in February that they go bust with immediate effect!

Yeah, I'm sure we all have our horror stories so let's hope all the airlines go bust.

I always wanted to get around the world quickly by foot, bicycle or canoe.

[HarryHacker]

Great news????

This will all end with much higher ticket prices!