The Plum Blossom Soars: How Taiwan’s largest cargo carrier makes freighters work

The storm passes

By any measure, the first nine months of 2017 have been stellar for China Airlines’ cargo operations. Cargo traffic rose 8.1 percent, year-over-year, during that period, outpacing capacity, which was up only 4.6 percent. Overall load factors, as a result, were 2.4 percentage points higher, at 69.7 percent.

Cargo traffic, alone, is meaningless unless revenues and yields grow in parallel, and this year, they surely have. Cargo revenues are up 20.6 percent, y-o-y, and Taiwan dollar cargo yields are up 11.5 percent for the first eight months of the year. In the end, it all comes back to CI’s flexible freighter network, which enables capacity to be adjusted “on the fly, based on market changes,” said Liu. Additional legs can be added to flights from Penang or Delhi, for example, if demand in, say, Manila or Singapore materializes. These additions can “boost product returns from inter-regional direct flights, and improve the economic performance of each flight.”

In the future, CI will strengthen the interplay between its freighters and passenger aircraft “to develop a cargo network with Taiwan as the central hub,” said Liu. “Inter-regional freight destinations and services in Asia will be integrated with European and American trans-oceanic routes to offer a transportation service with optimal transfer times.”

Another blossom on the branch for CI is e-commerce, which Liu believes “will be the growth driver for the air cargo industry.”