China Airlines to expand fleet size from 66 to 100 planes

Taipei -To comply with official policy to establish an aviation hub on the island, China Airlines, the national carrier, plans to expand fleet size from the current 66 to 100 planes within 10 years.

C. C. Chang, chairman of China Airlines, says that the company is experiencing insufficient capacity after the launch of direct flights between Taiwan and China in July 2008, a problem exasperated by gradually rising demand for cross-strait flights, hence the chairman`s comment about the need to expand fleet size.

However China Airline needs to raise capitalization to expand its fleet, says Chang. The airline`s registered capital is set at NT$52 billion (US$1.68 billion) and real paid-in capital is NT$46.3 billion (US$1.49 billion), with the gap of NT$5.7 billion (US$183.87 million) being the capital increment and inadequate for future expansion.

China Airlines and sister company–Mandarin Airlines—together will have a fleet of 80 leased planes by early next year. China Airlines has already ordered 14 A350-900 mid-capacity passenger planes for long-distance flights, which are expected to be delivered by 2015.

Chang says that China Airlines once planned to raise capital and import technologies from Singapore Airlines through stock swap considering the latter is a highly reputable carrier. But Singapore Airlines asked for a 25% stake and management participation in China Airlines, a proposal the latter refused that blocked the deal.

China Airlines is receptive to becoming more global and hence may allow higher ownership of its shares by foreign investors, Chang says.