The airline industry has suffered tremendously from the global pause on travel. But China Airlines has bucked the trend. So far, it's been the only airline in East Asia to report a healthy second-quarter profit. That's because the airline has turned to rely on its fleet of cargo aircraft, serving the demand for import and export of tech goods and medical equipment. Stuck in Taiwan for months, no one can look forward to an overseas holiday. Airlines are offering “fake foreign holidays” to try and recoup their losses. But China Airlines doesn’t have losses to worry about. Cargo makes better money than people-carrying, explained Wealth Magazine Chairman Hsieh Chin-ho on Facebook. In the second quarter of this year, only 13,000 people flew into Taiwan – a drop of 99.5% compared to the same period last year. China Airlines’ revenue was NT$26.3 billion in that period, down nearly 20% from the first quarter. But despite that, profit was up in the second quarter, bouncing back from the stinging first-quarter loss of NT$3 billion. Q2 profit stood at NT$2.7 billion, representing earnings per share of NT$0.45. Chu Hsiang-sheng Investment consultant The price is going up, the price of cargo services. Secondly, oil prices are withholding pressure quite well. All the demand has gone in the direction of freight, so we can see that China Airlines’ profits are better than EVA Air. Thanks to its 18 cargo aircraft, China Airlines has become the only airline in East Asia to report a profit so far. Hsieh said that with borders worldwide closed, movement of people is negligible. But cargo is still big business, and its value has even grown. Many airlines have converted passenger planes to cargo aircraft. Heavy staff bills incurred on passenger flights are airlines’ biggest burden – converting to cargo was a great move for China Airlines. Chu Hsiang-sheng Investment consultant In the third quarter, we’ll see that demand for IT goods like laptops and phones, as well as typical medical products, will be high. So the third quarter should be comparatively good. The import and export of tech products and medical equipment is good business for Taiwan, and with oil prices stable, cargo-carrying could be the future for beleaguered airlines.
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