China Airlines, EVA narrow Q3 losses

China Airlines, based in Taipei, posted a NT$2.62 billion loss compared with NT$5.88 billion a year earlier. EVA's loss was NT$2.22 billion compared with NT$4.51 billion. The numbers were derived from nine-month results announced yesterday.

Improving cross-strait ties have allowed the carriers to add more mainland flights, offsetting a global slump in international passenger and air-cargo demand. Airlines worldwide may lose a total of US$11 billion this year, according to the International Air Transport Association.

“Mainland flights are still the only profitable passenger routes, even though business conditions have improved,” said Stone Lin, an analyst at Yuanta Securities Co. in Taipei, who has a “hold” rating on the carriers.

China Airlines' third-quarter sales fell 23 percent from a year earlier to NT$25.9 billion, according to monthly filings to the Taiwan Stock Exchange. EVA's dropped 22 percent from a year earlier to NT$18.7 billion.

China Airlines was expected to make a NT$488 million third-quarter loss, according to the median of seven analyst estimates compiled by Bloomberg. The loss at EVA, based in northern Taiwan's Taoyuan, was expected to be NT$609 million, based on the median of seven estimates.

China Airlines fell one percent to NT$10.25 before the earnings announcement. EVA was unchanged at NT$12.40. The benchmark TAIEX index declined 0.2 percent.

Direct flights between Taiwan and the mainland, operated exclusively by Taiwanese and Chinese carriers, more than doubled to 270 a week from Aug. 31. The increase extended an improvement in relations between the two sides that began when Taiwan President Ma Ying-jeou took office on the island in May last year. Passengers previously had to travel though a third place, such as Hong Kong.

China Airlines' nine-month loss narrowed to NT$4.99 billion, from NT$12.4 billion, according to a statement. EVA narrowed its loss to NT$3.9 billion from NT$10.5 billion.

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