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Taiwanese airline stocks rise on vaccination travel to US

Profitability still dependent on long-term demand for freight: Analysts

Taiwan Taoyuan International Airport on June 2 

Taiwan Taoyuan International Airport on June 2  (CNA photo)

TAIPEI (Taiwan News) — Stocks of major Taiwanese airlines surged Thursday (June 3) as more Taiwanese and Taiwanese Americans flew to the U.S. to get vaccinated and escape Taiwan's coronavirus outbreak, but analysts warned that freight would remain the companies’ main business.

With a pandemic surge in the country and a greater demand for vaccination, coupled with the improving situation in the U.S., passenger traffic across the Pacific has been picking up, CNA reported.

However, the phenomenon could be short-lived and limited to “vaccine tourism” and students returning to their U.S. colleges, stock market analysts cautioned. EVA Air announced it would raise the number of its weekly flights between Taiwan Taoyuan International Airport and Los Angeles from three to seven, while main rival China Airlines (CAL) said it would adjust its schedule to demand.

The trend will help airlines reduce losses in passenger traffic, but in the near term, it is difficult to see travel restrictions being lifted, analysts said. If the companies want to be profitable over the long term, they still need to focus on performing well with freight traffic, they said.

Both major airlines' stocks rose by their maximum on Thursday: CAL to NT$20.5 (US$0.74) and EVA to NT$20.05.

Updated : 2021-06-22 16:35 GMT+08:00