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China Airlines and EVA Air respond to massive change in Taiwan – but the foreign LCCs are coming

10-Jan-2013

Profits have tumbled or become losses at China Airlines and EVA Air, Taiwan's two largest carriers and its only intercontinental ones. But the financials – affected by the usual suspects of high fuel and depressed freight and economic certainty – belie sound restructuring the carriers are making to respond to significant changes in the Taiwanese market, long one of the quietest areas in North Asia.

The opening of cross-Strait flights to China has, in a short time frame, delivered them an entirely new and very profitable market. It has meant pulling back elsewhere to pump capacity into the mainland - although additional aircraft were also acquired.

China Airlines is looking to permanently de-emphasise cargo's revenue contribution, sensing it to be too volatile, while EVA Air wants to increase its share. As the mainland market continues to expand, new growth (and competition) is also emerging from Japan after an open skies bilateral agreement. Further liberalisation across Asia will open new markets, but serving regional routes bears the risk of being pushed off if low cost carriers, much discussed in Taiwan - but mostly ignored - gain traction.

For all the change that has occurred, much more is inevitable in 2013. [2477 words]

Unlock the following content in this report:

Subheadings:

  • Cross-Strait flights to mainland China have fundamentally changed Taiwan aviation
  • With Open Skies agreement, the Taiwan-Japan market must change in 2013
  • Passenger revenue is growing while cargo proves difficult
  • China Airlines monthly yields and traffic
  • Eva Air monthly yields and traffic
  • Taiwanese airlines have a regional focus – but what happens when LCCs grow further?

Graphs and data:

  • Top 20 Airlines in Taiwan ranked by seats: 07-Jan-2013 to 13-Jan-2013
  • Taiwan international seats by region: 07-Jan-2013 to 13-Jan-2013
  • Taiwan top 10 international cities by seats: 07-Jan-2013 to 13-Jan-2013
  • Taiwan top 10 international countries by seats: 07-Jan-2013 to 13-Jan-2013
  • China Airlines and EVA Air destination comparison: 07-Jan-2013 to 13-Jan-2013
  • China Airlines and EVA Air frequency comparison: 07-Jan-2013 to 13-Jan-2013
  • China Airlines and EVA Air seat capacity comparison: 07-Jan-2013 to 13-Jan-2013
  • Annual seat capacity in select Greater China markets: 2003 to 2012
  • China Airlines monthly passenger yield (TWD): 2010-2012
  • China Airlines monthly cargo yield (TWD): 2010-2012
  • China Airlines monthly passenger revenue (TWD): 2010-2012
  • China Airlines monthly cargo revenue (TWD): 2010-2012
  • China Airlines monthly freight tonne kilometres: 2010-2012
  • China Airlines monthly RPKs: 2010-2012
  • EVA Air monthly passenger yield (TWD): 2010-2012
  • EVA Air monthly cargo yield (TWD): 2010-2012
  • EVA Air monthly passenger revenue (TWD): 2010-2012
  • EVA Air monthly cargo revenue (TWD): 2010-2012
  • EVA Air monthly freight volume: 2010-2012
  • EVA Air monthly RPKs: 2010-2012
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