Taiwan’s second-largest airline, EVA Air, has come up with its strategy to receive three new cargo planes within a year to maximize the cargo volume and improve the financial situation devastated by the COVID-19 crisis, as it is the main reason for the low resilient international travel.
During the company’s shareholder meeting, EVA Air’s Chairperson Steve Lin opened up about the company’s expectation to get three aircraft of Boeing 777 type in the fourth quarter.
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The airline operations have been complex since the breakout of the pandemic, with no finely tuned balance between aircraft capacity and passenger demand. The passenger airline network has been reduced to a bare minimum, implying there is no sufficient aircraft to shift business, government, and consumer needs. Though the flow of passengers has fallen significantly, EVA Air shifted its target to cargo shipments at a moment when demand for air cargo has leveled up due to the high capacity of containers.
Lin said that as compared to 2019, the number of aircraft in the sky currently is less than 50%, so there’s not the relatively massive effect of the continual hike in fuel prices.
Lin further forecasted the airlines have a long and challenging journey to cross ahead to grab the passenger demand, as the mutation of the virus continues and vaccination efficacy hasn’t been proven predictable. So when’ll several countries relax the international travel ban remains the burning question?
The critical need for cargo capacity has been a godsend for most airlines, along with EVA Air. The cash revenue dwindled due to passenger revenue loss. The handful of passenger flights have not been enough to prevent financial disaster. So, EVA Air continues to opt for more cargo operations to keep running the global supply chain.
Lin added that EVA Air company is regularly monitored with COVID brought market conditions and will adapt to the airline operations accordingly. In contrast, the cargo market will see a rise in demand in the 4th quarter as many countries have resumed their economic functions. Along with that, the fourth quarter has always been a peak season for cargo transportation and the launching of electronic products such as smartphones, Lin said.
There won’t be discrimination in cargo fares as cargo space demand in the Asia-Europe sector stands high.
The company stated that the travel rush for North Americans resumed in June due to the return of Taiwanese students and others visiting their friends or families or looking for vaccinations. As Taiwan was waiting for the arrival of enough COVID-19 vaccinations, some residents moved to the US for jobs. The ticket sales continued to pick up till July, as it saw a 27% increase in bookings compared with June. The seats were almost fully booked on both business and premium economy class of service in both way journey for July, EVA Air stated. With the international travel ban still in place in many parts, cargos have become the primary source of stabilizing their finance for airlines, with Taiwan’s vigorous export performance-boosting its trade.
As international fares have risen, EVA Air assumes that it’s unlikely to have low fares even when all countries’ borders are re-opened for air activities. It’s because there’s an additional cost associated with reflecting COVID-19 prevention measures onboard, which will be added up in passenger fares.
EVA Air will deliver 3 Boeing 777 freight planes, while the passenger aircraft of Boeing 787-9 will be delayed until 2023. The airline has asked Boeing to postpone the passenger airplane as they are not in need of much air customer capacity.
The airline currently has five freighters. It is significantly fewer than 18 freighters owned by China Airlines Ltd., Which is the domestic rival of EVA Air. Though the airline had previously expected the delivery of two of the three cargo jets in the fourth quarter, the aerospace giant Boeing Company has accepted to avail the third cargo plane by 2021 end.
From March 1, 2021, Taiwan Government has permitted international passenger transfers. EVA will make arrangements to serve this group of travelers at Taiwan Taoyuan International Airport.
The cargo load factor increased to 94.6% last quarter, which was 16% more than a year earlier, said EVA President Clay Sun. The financial report of EVA revealed that 1.7 billion of its revenue last quarter came from passenger business, with 62% of it coming from North American routes. The load factor was down at 17%. Meanwhile, 15.2 billion cargo revenue was advanced last quarter; the total cargo weight rocketed to 43% with 200000 tons, the company reported.
EVA Air will publish a new flight schedule in August, commencing a total of 30 flights in a week. Among those, seven flights will be on Los Angeles and San Francisco routes, five flights to Seattle, and four weekly flights on the New York route. The airline will serve Chicago and Vancouver twice a week while there will only be one flight on Houston and Toronto routes.
EVA Air has launched its Cargo website, which the consignees, freight forwarders can use to access the consignment status and flight schedules. As the trend of online shopping has boomed with substantial growth in airmail delivery demand, it has generated opportunities for airfreight business. The users can also check the arrival and departure of specific date flights.
Turning ON of airfreight market
In this pandemic period, airfreight has become one of the essential links in business worldwide. The COVID crisis has shown the strangest sight to the public, the aircraft jetting into the near-deserted airport, cabins brimming with cardboard boxes, instead of passengers. The sky of air passengers has starved with travel bans. In this scenario, the airfreight market is racing ahead of its capacity of much demand, particularly for Personal Protective Equipment(PPE) and vaccines doses.
The crisis has spiked the need for medical supplements. The sharp dropping in flights has seen freight forwarders scrambling for the movement of urgent cargo shipments- not just PPE, medical stuff, and doses, but also time-critical supply chain goods.
Even after the eventual recovery of passenger jet service in the coming years, the demand for freight aircraft will stay high.
It’s not that EVA Air has come up with cargo aircraft in this situation only. The freight market has always been EVA’s interest, but with the COVID situation, the freight operation has gained more attention, catering to delivering more consignments before passenger demand returns. The adjustment to the cargo business model will help EVA Air to keep more aircraft in the sky.
More about EVA Air
EVA Airways is an international airline in Taiwan. It has its base at Taiwan Taoyuan International Airport. EVA stands for Evergreen Airways, as this airline, since its inception in 1989, has been operating both passenger and cargo air services to over 40 international destinations across four continents of Europe, Australia, Europe, and North America. This large privately-owned airline is ranked as a 5-star airline and one of the largest airlines in Taiwan. “Sharing the World, Flying Together” is its slogan.
In addition to passenger air services, it provides air cargo shipments, ground handling, airline engineering, and catering services. EVA Air Cargo collaborates with Evergreen’s worldwide shipping network to offer cargo transport on both land and sea. It was ranked as the 15Th safest airline globally in January 2018 due to its no record of fatal accidents or hull losses. It has both Airbus and Boeing aircraft on its fleet, including Airbus A330, Boeing 777, AirbusA321, Boeing 787, Boeing 777, ATR72. They all are utilized to serve on both passenger and cargo routes.
Boeing 777 freighter for EVA AIR
Boeing 777 freighter is the largest twin-engine cargo carrier in the world. It is highly efficient, having a maximum capacity of 102 tons, and can fly up to the range of 5000 nautical miles. The freighter is environmentally friendly and fuel-efficient, offsets the carbon emission to a low point.
EVA Air can utilize these aircraft to bolster its fleet from Taiwan to any North American destinations as the business is booming on those routes.
In 2017, EVA took the delivery of its foremost Boeing 777 cargo planes. The airline equipped it with GE90-115B turbofan engines to reduce costs for maintenance. In September 2020, EVA cut off its seven Boeing 787-10 Dreamliner passenger aircraft due to dropping passenger count. However, they were replaced by three 777 F cargo jets and four smaller 787-9 passenger jets.
EVA Air has once again the 777 freighters to modernize their world-class fleet of cargo planes. EVA Air has plans to increase its fleet of operational twin-aisle to 60+ jets by the end of 2025 if everything goes as per plan.
The prospects are bright for EVA air with adjustment to the market trends and more aircraft adding up to fuel its fleet operations to several world destinations.