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China Airlines expects good cargo year, orders new aircraft

TAIWAN's largest carrier, China Airlines (CAL), is banking on rising cargo volumes and lower crude oil prices to push profits up to a four-year high this year, reports the Taipei Times.

"We maintain a cautiously optimistic view on global crude oil prices this year," chairman Sun Hung-hsiang told reporters after receiving an award for the nation's best international carrier from the Civil Aeronautics Administration.

Falling crude oil prices have helped reduce the airline's cost burden, but the positive effect might be partly offset by the recent depreciation of the New Taiwan dollar, Mr Sun warned.

Improving prospects for the air cargo sector is expected to lift the carrier's business outlook this year.

To cope with growing demand, the company is considering letting its three idle Boeing 747 cargo planes resume operations. The freighters have been in storage in the US since 2012 when cargo demand turned sluggish, he said.

The carrier has been trying to return to the earnings peak it hit in 2010, when it made a profit of NTW10.62 billion (US$335.06 million).

Mr Sun said he has seen satisfactory demand for cargo services and passenger traffic this quarter.

The airline and two of its subsidiaries - Mandarin Airlines and Tigerair Taiwan - are mulling over plans to jointly order 50 new narrow-body planes, 20 of which would be for fleet replacement, the chairman revealed.