By Mark Pilling at Farnborough
Over the next couple of years a once-in-a-lifetime opportunity will appear for Taiwanese carrier EVA Air, believes its new president Peter Chen.
“If you look at the business cycle, in Taiwan we have a very unique situation right now with the two sides of the Strait going to open up.”
Chen, who became president at the beginning of July, is referring to the prospect of scheduled services being allowed between mainland China and the island of Taiwan across the 180km-wide Taiwan or Formosa Strait. China considers Taiwan a renegade province and the relations between the two have been strained. Non-stop flights have been banned since 1949, forcing passengers and cargo to transit through a third point, usually Hong Kong or Macau.
The hope is that not only will EVA Air be able to open up new routes between the two countries, explains Chen, but that the EVA Group will develop various businesses in China. It has already put its toe in the water in a new joint venture cargo carrier with partner Shanghai Airlines. This carrier, called Shanghai Airlines Cargo International, began operating in July with a leased Boeing 747-200F flying three times weekly from Shanghai-Anchorage-Los Angeles. EVA Air has a 25% stake in the carrier with Shanghai Airlines holding majority ownership.
The move comes as an increasing amount of direct charter flights are being allowed between the two countries. “Flights have increased from 36 per year to 168 per year,” says Chen. “But we see this as only an intermediate move from the two sides. Now the discussions are moving to open up China.”
The latest move is a decision by the Taiwanese authorities to allow airlines to operate regular charters between the two countries during major holidays. This could come into force by the end of the year, says Chen. The two sides have also allowed carriers from both countries to operate cargo charter flights if they are serving Taiwanese factories located in China.
“We see business opportunities there [in China] – not only because of more passenger and cargo traffic but also in extended businesses, like maintenance and catering,” says Chen. He also doesn’t rule out EVA becoming involved in a domestic passenger operation in China. “It’s just like marriage – you have to pick the right partner to form this kind of alliance.”
For now, EVA is concentrating on Shanghai Airlines Cargo International as its main platform in China. Cargo is already a major focus for EVA. It operates three 747-400Fs, 14 MD-11Fs and several 747 Combis. All the Combis will be converted to full freighter configuration from 2007, says Chen.
This will give EVA enough cargo capacity through 2008, with the carrier looking to add more from 2009, says Chen. It will evaluate the 777F and 747-8F, he says.
As the carrier takes delivery of new 777s its long and medium-haul fleet is in good shape, says Chen. The picture on the narrowbody fleet is less clear. Subsidiary UNI Air, which operates a fleet of 11 MD-90s, could operate across the Taiwan Strait to China if allowed. “We could possibly see some smaller aircraft offering direct services on thin routes to China,” says Chen. “But we are still waiting for a clearer political atmosphere to see what we should do.” Aircraft like the Airbus A319, Boeing 737 or Embraer 190 will be considered. Click here for more Airline Business interviews