China Airlines in talks over aircraft order

Taiwanese carrier China Airlines expected to place an order for more than 20 Airbus SE or Boeing narrow body aircraft by the end of 2017, 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. The first deliveries should take place in 2021 or 2022, China Airlines president Hsieh Su-Chien said.

The airline would order “more than 20 unless we see the market is going to die”, he said on the sidelines of a conference.

Hsieh said that the airline was in talks with aircraft and engine manufacturers.

China Airlines, the country’s second biggest by revenue behind EVA Airways, reported higher passenger numbers in the nine months to September 30 and is looking to expand flights to Southeast Asia.

The carrier receives about 28% of its revenue from cargo, the highest level in the AsiaPacific region, although Cathay Pacific Airways and Korean Air Lines have more sizeable freight businesses in volume terms.

Global air cargo volumes surged 10.4% in the first half in their strongest half-year performance in seven years and nearly triple the industry’s average growth rate of 3.9% in the past five years.

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 high-tech gadgets such as Apple’s new iPhone 8 as well as the iPhone X.

China Airlines senior vicepresident Steve Chang said the airline had easily raised the rates it charged for transporting semiconductors since they could be moved using only dedicated freight aircraft.

In the nine months, China Airlines reported an average cargo yield that was 11.5% higher than the same period a year ago and an 8% rise in freight volume.