China Airlines and EVA Air, Taiwan’s largest and second largest air carriers by revenue and traffic respectively, have reported sharp declines in profitability in the nine months ended 30-Sep-2011 weighed down by the poor performance of the air cargo transportation sector. The third quarter, traditionally a stronger period for earnings for Taiwanese carriers, delivered profits for both carriers, with an operating profit of around USD34 million for China Airlines and of around USD82 million for EVA Air.

Net profits for China Airlines stood at around USD29 million in the third quarter, with a net profit result of around USD42 million for EVA Air, based on CAPA calculations. However, the weakness in the cargo transportation sector, driven by a slump in the electronics industry whose shipments rely on air cargo transportation services, has impacted the carriers. Continued pressure on the cargo segment is expected in the months ahead.