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Week 49


China Airlines chairman sets sights on Europe

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December 9th 2016

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China Airlines (CAL) chairman, Ho Nuan-hsuan, wants his airline to become the Taiwanese market leader in Europe in 2017 by offering more non-stop services to the continent than local internatonal rival, EVA Airways. Read More »

To achieve this, CAL is banking on the latest addition to its fleet, the long-range A350-900. The twin-jet will replace CAL’s A340-300s to Amsterdam, Rome and Vienna next year and will convert its one stop flights, via Bangkok, to non-stop services. CAL also will resume previously unprofitable flights to London’s Heathrow with the A350 next year. CAL had a market share of 21% between Europe and Taiwan in 2015. The SkyTeam member expects to receive four A350s by the end of December, six in 2017 and four in 2018.

CAL rival, EVA Airways, which flies to Amsterdam, Vienna, Heathrow and Paris from Taipei, also as one-stops via Bangkok, has no plans to convert the four destinations into non-stops.

EVA has focused on the Taiwan-U.S. market by offering more frequencies and capacity in the market than any other airline. To underline its commitment to North America, EVA has announced frequency increases to Seattle and San Francisco. Earlier this year it added capacity to Los Angeles and New York and launched Houston.

CAL and EVA anticipate a currency windfall from the recent appreciation of the New Taiwan Dollar compared with the depreciation of the Euro and Mainland China’s Renminbi.

Both have posted profits in the third quarter. EVA reported a NT$2.5 billion ($79 million) net profit through to September 30, up 1.9% year-on-year; CAL posted a net profit of NT$1.1 billion. The closure of TransAsia Airways, and its V Air budget subsidiary, should feed more passengers into the networks of CAL and EVA.

Taiwan’s Civil Aeronautics Administration (CAA) has said it expected to complete the reassignment of TransAsia’s traffic rights by the end of this month, with no preference to be given to CAL, EVA or their low-cost subsidiary. CAL immediately assumed TransAsia’s domestic network, after the latter declared its bankruptcy, to limit passenger inconvenience.

TransAsia’s cross straits rights are desired. It operated 61 weekly flights from five Taiwanese airports to 15 Mainland destinations, including extremely scarce Taipei Songshan-Shanghai Hongqiao and Pudong rotations.

"If their [CAL’s and EVA’s] requests do not exceed the cap on cross strait flights, we will allocate the routes based on their demands. However, we would have to host an official meeting to determine how the aviation rights should be reassigned if their requests exceed the cap on cross strait flights. We will then make our recommendations to the Ministry of Transportation and Communications, which has to approve them," CAA planning director, Chen Yau-yu, told the Taipei Times.

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