TransAsia only Taiwanese carrier to pay dividend

TransAsia Airways Corp. will be the only listed air carrier in Taiwan to pay a cash dividend to its shareholders this year, reflecting the company’s better profitability last year when compared with its peers.

The nation’s other two listed airlines, China Airlines Ltd and EVA Airways Corp, have both announced that there will be no dividend payout this year because global economic uncertainties hurt their earnings performance last year.

TransAsia, which mainly operates regional and cross-strait passenger routes, posted NT$663.96 million (US$22.44 million), or NT$1.34 per share, in net profit last year, the highest earnings per share of the three listed carriers, Taiwan Stock Exchange (TWSE) data showed.

As a result, the company’s board of directors decided to approve a NT$0.2 per share cash dividend to its shareholders this year, TransAsia said in a statement last week.

However, the carrier’s profitability last year was still lower than a year earlier, an indication that a labored global economy affected the aviation sector.

TransAsia reported a net profit of NT$917.65 million, or earnings per share of NT$1.91, in 2010, TWSE data showed.

The same headwinds took a bigger toll on CAL and EVA’s earnings last year as weak external demand and slowing consumption hurt the two air carriers’ cargo business, which mainly transports consumer electronics products for major technology firms.

This led to their decision to not pay any cash or stock dividends to shareholders this year.

CAL — the nation’s largest carrier — posted NT$1.95 billion, or NT$0.42 per share, in net losses last year, compared with the NT$10.62 billion profit, or earnings per share of NT$2.391, recorded a year earlier, the company said in its stock exchange filing.

Taiwan’s second-largest airline, EVA, has not yet released its full-year net profit. Waterland Securities Co earlier this month forecast that the carrier’s net earnings would slow to NT$1.5 billion, or NT$0.46 per share, last year, from NT$12.02 billion, or earnings per share of NT$4.06, a year earlier.

Both CAL and EVA have been starting to adjust downward their cargo capacity by either idling or selling cargo carriers since late last year to deal with still-slow external demand this year.

The passenger business, which carriers had high hopes for this year, has also seen a major issue arise — rising crude oil prices.

Because fuel costs account for more than 40 percent of overall costs for CAL and EVA, officials from both carriers said earlier this year that they would focus more on regional business this year, including routes to China and other destinations in the Asia-Pacific region, because long-haul routes cost them more in fuel.

CAL yesterday announced the launch of two new Japanese routes, with three flights a week to Shizuoka and Kagoshima, after an aviation pact was signed by Taiwan and Japan last year. It is also planning to offer more weekly flights to Japan, including the new Taiwan Taoyuan International Airport-Toyama route, from April 16.

Meanwhile, the carrier’s subsidiary, Mandarin Airlines Corp, also launched a new route between Taipei and China’s Wenzhou, with two flights a week.

Although the nation’s airlines still have an advantage over their overseas peers on cross-strait routes, Capital Securities Corp said in a report on Friday that rising fuel prices would increase cost pressures this year, further affecting the sector’s outlook.