Alexa

China Airlines posts unexpected loss

China Airlines posts unexpected loss

China Airlines, Taiwan's largest carrier, posted an unexpected first-quarter loss, compared with a year-earlier profit, as it retired an old plane and the island's information technology exports fell.
The airline made a loss of NT$805.8 million (US$24 million) in the three months ended March 31, compared with a NT$385.2 million profit a year earlier, it said in a filing to the Taiwan Stock Exchange yesterday. That trailed the median estimate of a NT$234 million profit in a Bloomberg News survey of four analysts.
The Taipei-based carrier booked a loss of about NT$1 billion from the sale of its last Airbus SAS A300-600R passenger plane, as it retired older aircraft to cut its maintenance costs. Taiwanese airlines' profits are coming under pressure from falling information technology exports and a new high-speed railway, which has won customers on domestic routes.
"There's not much growth momentum for local carriers' sales," said Ernest Chiang, who manages about US$27 million at Industrial Bank of Taiwan Investment Trust Co. in Taipei. He doesn't own any China Airlines shares.
Shares of China Airlines fell 2 percent to close at NT$14.6 after the earnings announcement. The stock has fallen 4 percent this year, compared with a 0.7 percent gain in the benchmark Taiex index.
China Airlines boosted its first-quarter sales 2.8 percent to NT$28.6 billion, according to calculations based on its monthly statements. Sales rose 12 percent in the preceding quarter. The company earns about 60 percent of its sales from passengers and the rest from cargo, said spokesman Johnson Sun.
Selling the last A300-600R "helped us simplify our fleet," Sun added.
Air-cargo demand in Taiwan has fallen because Quanta Computer Inc., the world's biggest maker of notebook computers, and other Taiwanese technology companies have shifted production to the mainland to benefit from lower wage costs. Taiwan's exports of information technology and communications products plunged 17 percent in the first quarter, the finance ministry said April 9.
Taiwan High Speed Rail Corp., which runs services between the island's two-largest cities, began operations of January 5, competing with China Airlines' Mandarin Airlines unit and other carriers.
More than 2 million passengers used the train service in its first two months of operations, company spokeswoman Jennifer Chen said March 14. Train tickets for the trip between Taipei and Kaohsiung, the island's largest port, cost about 30 percent less than airlines' fares.


Updated : 2021-03-08 02:14 GMT+08:00