Eva Air keeps watch on low-cost competition

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The rise of budget carriers in the region is having a sizable impact on Eva Air's business in Asia.

Low-cost carriers have eroded about 10% of the Taiwanese carrier's intra-Asia business, forcing it to keep a keen watch on the situation, its executive vice-president Austin Cheng tells Flightglobal.

He adds that 45% of Eva's business comes from its operations in Asia, and that the figure has taken a hit because of the strong growth of low-cost carriers in the region.

The relatively small domestic market in Taiwan compared with countries such as Indonesia and Malaysia, however, does not make the setting up of a low-cost arm the most ideal option, says Cheng.

Eva had previously said that it could convert its regional subsidiary Uni Air into a low-cost airline to compete against budget carriers eating into its territory.

"In the long term, we don't know how the low-cost market will grow. Right now, we're still able to handle it, but we have to monitor this very closely," he stresses.

In the near term, the airline will use alliances to strengthen its position as it takes the step of joining Star Alliance in 2013.

"We will enhance our network through alliances and also bring in frequent fliers when we join Star," he says, adding that the carrier has already started talks on possible cooperation with various Star Alliance carriers. However, he declined to elaborate on the details.

Cheng adds that Eva is also "very interested" in having the proposed Boeing 787-10 as part of its fleet from 2019, but is still awaiting more details about the aircraft from the airframer. Smaller variants of the jet are too small for Eva's needs.

The airline is also assessing the Airbus A350-900 and will likely make a decision in 2013. It could also order more of the Airbus A330-300s, which it has three on lease, because of its "good performance".