October 24, 2017 / 11:34 AM / 2 years ago

INTERVIEW-China Airlines expects to order at least 20 narrow body jets

TAIPEI, Oct 24 (Reuters) - Taiwanese carrier China Airlines Ltd expects to place an order for more than 20 Airbus SE or Boeing Co narrow body aircraft by the end of the year, the airline’s president said on Tuesday.

The aircraft being evaluated to replace 20 Boeing 737-800s include the Airbus A320neo and A321neo and the Boeing 737 MAX 8, 9 and 10 models and the first deliveries should occur in 2021 or 2022, China Airlines President Hsieh Su-Chien said.

“(We will order) more than 20 unless we see the market is going to die,” he told Reuters on the sidelines of an industry conference. “I think we will expand.”

Hsieh said the airline was in talks with the aircraft and engine manufacturers and hoped to reach a decision by the end of the year.

China Airlines, the country’s second-biggest by revenue behind EVA Airways Corp, reported rising passenger numbers in the nine months ended Sept. 30 and is looking to expand flights to south-east Asia.

The carrier receives around 28 percent of its revenue from cargo, the highest level in the Asia-Pacific region, although Cathay Pacific Airways Ltd and Korean Air Lines Co have more sizeable freight businesses in volume terms.

Global air cargo volumes surged 10.4 percent in the first half - their strongest half-year performance in seven years and nearly triple the industry’s average growth rate of 3.9 percent in past five years, data from the International Air Transport Association shows.

Taiwan’s export order value hit its highest on record in September. Taiwan’s export orders are a leading indicator of demand for Asia’s exports and for hi-tech gadgets such as Apple’s new iPhone 8 as well as the iPhone X, which is expected to be shipped from Nov. 3.

China Airlines Senior Vice President Steve Chang said the airline had easily raised the rates it charged for transporting semiconductors since they can only be moved using dedicated freight aircraft. The Taiwanese airline has 18 747 freighters.

In the nine months ended Sept. 30, China Airlines reported an average cargo yield 11.5 percent higher than the same period the prior year as well as an 8 percent rise in freight volumes.

Chang said forward bookings were strong, meaning the improved conditions in the freight market were likely to continue until at least the first quarter of 2018. (Reporting by Jamie Freed; editing by Alexander Smith)

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