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Aviation History
1997
1997 - 2293.PDF
AIR TRANSPORT EVA Airways of Taiwan has achieved formidable progress in six years BRENT HANNON/TAIPEI EVA AIRWAYS, LAUNCHED with little fanfare in mid-1991, today boasts a fleet of 30, a route network which extends to London, New York and Panama City, and a balance sheet which shows increasingly healthy profits. Since its launch, EVA has bought shares in three domestic airlines, pioneered the world's first four-class service, opened a $70 million flight kitchen, signed an alliance with Con tinental Airlines and achieved a spotless safety record. Despite its expensive beginnings, which included all-new aircraft and a state-of-the-art training centre, the fledgling airline turned in a profit in just its fifth year of existence. In the next five years, EVA will put emphasis on cargo, on continued efforts to expand into the lucrative Hong Kong and Japan markets, and on increased frequencies to the USA in the wake of the open-skies agreement recently reached between that country and Taiwan. As always, EVA is ready to fly to China, it and when permission is granted by Taiwan. After losing $84 million in 1993 and S36 mil lion in 1994, EVA has reversed its fortunes. It made a profit of S7.2 million in 1995, and $17.1 million in 1996. EVA president Richard Lluang predicts for 1997 a year-end profit of S22 mil lion. Load factors have steadily increased, from 60% in 1991 to 71% in 1994, 73.5% in 1996, and more than 75% so far in 1997, despite the continuing arrival of new aircraft. F.VAs fleet consists of nine Boeing 767-300s, 12 747-400s (including ten combis), six Boeing MD-1 Is (including three freighters), and three BoeingMD-90-30s. The airline will take deliv ery of two more MD-11 freighters and another passenger 747-400 by the end of the year, and two more passenger 747-400s by April 1998. By the year 2002, EVA plans to have a fleet of 60, by which time it expects revenues to have increased to S3.1 billion, compared with Si.3 billion in 1996. Its route network is heavily geared toward South-East Asia, while long-haul flight destinations include Amsterdam, Auck land, Brisbane, Brussels, London, Paris, Sydney and Vienna. BUOYANT ECONOMY EVAs rapid expansion has been helped by a fast- growing local travel market and a buoyant econ omy. International and domestic air travel in Taiwan continue to increase by about 10% a year. In the first six mondis of 1997, the number of people taking overseas trips rose by 11.5% over the same period in 1996, while domestic- air travel was up by 9.4%. EVAs 1997 profit projection is based on increases in yield, and in cargo revenue. "This year, we increased our fares," says Huang. "Taiwan has more trav ellers, but it is because we have a higher-air-fare policy that we can generate more revenue." As befits a subsidiary of Ever green Group, the world's largest container-shipping company, EVA's cargo busi ness is doing "much better" than expected this year. Huang attributes the rise in revenue to EVAs daily combi schedules to the USA, which allow it to guarantee next-day service. Ereight customers, many of them with time- sensitive computer components, will pay a pre mium for this guarantee. "They are willing to pay two to three times higher than ordinary rates, because we fly even' day," says Huang. Now, 33% of the airline's revenue comes from cargo - by the year 2000, it expects to earn half of its revenue from freighter operations. EVA's success is good news for aircraft manu facturers. The carrier and its three domestic partners will need new aircraft in ever)' range, according to Huang. "We need more narrow- bodies to serve domestic and regional routes," he says. "Whether we will continue to purchase MD-90s or switch to other manufacturers is under debate in the company." Boeing 737s and 757s are being considered, he says. EVAsigned a letter of intent for eight Boeing 777s in June 1995, but it has yet to place an order. It still wants a long-range aircraft which can fly direct from Taipei to London, New York and Paris. "At this moment we are interested in the longer-range 777-200," says Huang, "but we haven't come to a conclusion." EVA owns 40% of tiny Taiwan Airways, 2 5 % of Great China Airlines, and 51% of UNI Air. The three complement each other: Taiwan Airways is an operator of small turboprops serving outlying islands,Great China serves larger cities with larger turbo- props and UNI flies narrow- body jets on Taiwan trunk routes and overseas charters. Taiwan Airways will require more turboprops for its ser vices to the country's sparsely populated islands, augmenting its fleet of three 19-seat Dor mer 228s and two Pilatus Britten-Norman Islanders. "We will continue to purchase propeller aircraft in small sizes, like the Dornier and die [Bombardier de Havilland] Dash 8," says I Iuang. Great China, an operator of 12 Dash 8-300s and one MD-90, has placed six firm orders and six options on 78-seat Dash 8-400s for deliver)- beginning in 1999, making it the launch cus tomer for that aircraft. UNI Air, with a fleet of five MD-90s and five British Aerospace 146-300s, concentrates on • "EVA has revei'sed its fortunes... president Richard Huang predicts for 1991 a year- end profit of $22 million." FLIGHT INTERNATIONAL 10 - 16 September 1997 33
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