Passenger Demand Returns to Normal Growth, Load Factors Stay High
After the post-pandemic revenge rebound, the global aviation industry entered a supply-demand adjustment phase this year. According to the International Air Transport Association, global passenger demand will gradually return to a long-term growth track of about 3.5% to 4.5% per year, with Asia-Pacific and the Middle East as the main growth engines. In the first three quarters of this year, Taiwan's two major carriers showed resilient passenger strength, with EVA Air reaching a cumulative load factor of 81.5% and China Airlines reaching 83.0%, showing outbound leisure and business travel demand remains strong. Despite a brief cooling in demand on long-haul Europe and U.S. routes and higher international oil prices driven by rising geopolitical tensions, overall load factors remain high, and operating momentum is largely intact.
Accelerating New Aircraft Introductions for Long-Haul Capacity
To improve operating efficiency and meet future long-haul demand, both carriers are upgrading their fleets. EVA Air is taking intensive deliveries of Boeing 787 Dreamliners to gradually replace older models and reduce fuel burn and maintenance costs. China Airlines continues to introduce 787 and A350 series aircraft and plans to fully retire its aging A330-300 fleet in 2028. Institutional investors note that new-generation wide-body aircraft help improve fuel efficiency and scheduling flexibility, laying a solid foundation for medium- to long-term capacity Powertech growth and network development, and are key to sustaining high load factors and earnings quality.
Cargo Defies Off-Season Slump on AI and E-commerce
Beyond steady passenger operations, air cargo performed strongly this year, defying the usual off-season slump. Benefiting from booming cross-border e-commerce and global AI-driven demand for high-value servers, semiconductor equipment and advanced-packaging chips, the Baltic Air Freight Index has stayed relatively high. With more flexible fuel surcharges for cargo and strong rigid demand for high-value outbound shipments from Asia, airlines have better cost pass-through ability amid recent oil price increases, changing the old pattern where higher oil prices wiped out profits. Cargo has become an important moat for operations.
Oil Price Pressure Expected to Ease, Institutions Favor China Airlines
On fuel cost concerns, the U.S. Energy Information Administration recently raised its 2026 Brent crude average price forecast to 96 per barrel, but also expects the 2027 average to fall back to 84 per barrel as output rises, indicating medium- to long-term jet fuel pressure should ease. Weighing short-term oil price volatility and valuation, domestic institutional investors take different strategies for the two carriers, maintaining a range-trading view on EVA Air; for China Airlines, with relatively low valuation, they give an overweight rating and advise investors to buy on pullbacks, while still carefully assessing risks.