TAIPEI -- China Airlines fell into the red for the six months ended June on the weight of high fuel costs but remains confident about a second-half turnaround in light of strong performance in greater Asia.
The Taiwanese airline posted a net loss of around 2 billion New Taiwan dollars ($66 million), tumbling from the year-earlier NT$1.2 billion profit. Revenue rose 7% to NT$73.9 billion, but fuel prices jumped 28.8%.
Many airlines in Asia have been struggling on the back of high fuel costs, and China Airlines was no exception. But thanks to increased use of new, fuel-efficient planes, the Taoyuan-based carrier posted an April-June net profit of NT$1.7 billion.
Earnings will pick up further, supported by brisk performance in flights servicing Japanese, South Korean and Southeast Asian destinations, President Hsieh Su-Chien said at an earnings briefing here Thursday. Reaffirming the top executive's "strong confidence in second-half performance," the company said it sees double-digit revenue growth as a possibility for July to December.
Despite the optimism about Asian operations overall, China Airlines faces minor turbulence in flights to and from mainland China. Service between there and Taiwan accounted for 15% of overall revenue in the first half, down roughly 3 percentage points from a peak. Growing pressure from Beijing on Taiwanese President Tsai Ing-wen's government has slowed tourism significantly, according to Taiwanese authorities.
China Airlines will reduce or suspend flights between the mainland and Taiwan that are struggling to attract enough passengers, Senior Vice President Chang Chih-Chieh said.