Brent Hannon/TAIPEI
China Airlines (CAL) subsidiary Mandarin Airlines plans to acquire at least four Next Generation Boeing 737s when the merger with Formosa Airlines is completed later this year.
The CAL board approved the Mandarin/Formosa merger this month and plans to complete the changes by the end of the third quarter.
After the merger, CAL's shareholding in Mandarin will drop from 100% to less than 70%. CAL previously owned 41% of Formosa Airlines and 100% of Mandarin. Computer company ADI's 41% stake in Formosa will make it the second-largest shareholder in Mandarin.
Sherman Yeng, CAL's corporate and marketing planning division director, says Mandarin will need at least four 737-600s or -700s for use on domestic and regional services, and will lease the aircraft initially.
CAL is already a customer for the Next Generation 737. Its current fleet includes eight 737-800s, with seven more to be delivered, two of which will arrive this year.
The merged fleet will include three Boeing 747s (two SPs and a -400) and four MD-11s operated by the old Mandarin, along with Formosa's five Fokker 50s (above), two Fokker 100s and three Fairchild Dornier 228s.
Yeng says the Fokkers will be retained, but the three Dornier 228s will be sold. Formosa's six Saab 340s have been retired and the airline will revamp its network, dropping some outer island routes.
CAL president Sandy Liu says that by mid-year, Mandarin's two ageing Boeing 747SPs will have been grounded. "If I can't sell them, I will just scrap them," says Liu. "CAL will ground any Airbus A300B4s that haven't been sold by mid-year." Two of CAL's six A300B4s have already been sold.
CAL made an operating profit in January and February, says Liu. "Business has been very good in the first two months of the year - better than we expected." He attributes the profit to CAL's cost-cutting programme, which included a sharp reduction in its fleet.
Source: Flight International
