The Taiwan-China routes that have helped local airlines earn record revenues and profits in the past year will continue to be the major profit engine for the local airline industry this year, according to market analysts.
Bruce Tsao (曹伯瑄), a Taipei-based analyst for Capital Securities (群益證券), recently told Central News Agency that Chinese tourists taking direct flights to Taiwan would become the most important source of passengers on routes across the Taiwan Strait.
The routes benefit only Taiwanese and Chinese carriers because they are not open to airlines based in other countries.
CHINESE VISITORS
Mandarin Airlines (華信航空) president Harris Wang (王華宇) also cited the continued growth in Chinese visitors to Taiwan as one of the factors expected to help the industry this year.
The optimism of industry insiders was buoyed after the two countries decided in a round of trade talks held late last year to raise the ceiling on the number of Chinese nationals allowed to visit Taiwan per day from 3,000 to 4,000, a change which came into effect on Saturday.
INDEPENDENT TRAVELERS
Both sides also agreed to allow Chinese citizens to travel to Taiwan independently without being confined to tour groups starting sometime in the first half of this year.
Meanwhile, local airlines also believed business charter flights between Taiwan and China would have considerable potential if allowed and would help attract multinational companies to set up regional offices in Taiwan.
Civil aviation officials from Taiwan and China held talks late last month and local airline -companies are reportedly likely to begin offering business chartered flights between the two countries sometime in the first half of this year.
SAVINGS
The business-oriented service would also increase the profits of local airlines, such as China Airlines Ltd (中華航空) and EVA Airways (長榮航空), by helping them save between 20 percent and 50 percent on fuel costs, according to E. Sun Securities Co’s (玉山證券) estimates.
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