Interview with Mr. Steve Lin, Chairman, EVA Airways

EBR - Since Kuomintang-leader Dr Ma Ying-jeou was elected as President of the Republic of China tensions with Mainland China are reduced and economic ties are strengthened. There are now direct connections between Taipei and Shanghai for instance. How much did EVA profit from this development and what do you expect for the future?

Mr. Lin - Eased tensions and a stronger economic relationship with China are developments that most Taiwan enterprises have longed for. In the airline industry, we are privileged to play a role in bridging cultural and economic exchanges with direct flight across the strait. This direct link not only carries people and air freight back and forth in a more efficient and economical way but it also creates new opportunities and promotes competition, benefitting businesses and consumers alike.

The most recent agreement between Taiwan and China provides for increased flight frequency. Starting in the last quarter of 2010, EVA and our UNI Air subsidiary will add service and boost operations to 85 or more flights a week to and from 18 gateways in China. This increase includes both passenger and cargo service. We estimate that our China routes produce around 10 percent of our revenue.

Now that the Economic Cooperation Framework Agreement (ECFA) preferential trade document has been signed, we believe trade and travel between Taiwan and China will boom. This is a positive development for EVA. We expect future talks to result in more flights to high-demand destinations such as Beijing and Shanghai.

EBR - How important is Europe for EVA compared with the Asian and North American market? Do you expect more tourism after a possible visa waiver by the EU?

Mr. Lin - Europe is important to EVA’s global passenger and cargo services. We operate more than 20 passenger and cargo flights a week to major European gateways, including London, Paris, Amsterdam and Vienna and we provide dedicated cargo services to Frankfurt and Brussels. As soon as the British government offered the first visa waiver in 2009, we boosted London service and began making daily flights to accommodate the growing demand. Ideally, the entire European Union will offer visa waivers within the near future, which will spur tourism and business traveler between Taiwan and EU countries.

EBR - The last 10, 15 years we have seen merging and strong cooperation between airlines in Europe and the United States. How is the situation in Taiwan and South-East Asian region and what do you expect for the near future?

Mr. Lin -The merger, consolidation and integration among airlines in the United States and Europe over the last decade has been part of the fallout from the tremendous losses most carriers experienced, the economic turmoil and efforts to streamline operations and improve profitability. In China, airline integration has been encouraged to enable the major Chinese carriers to capture a greater share of the market. At the same time, due to cultural and government influences in different countries, airlines in Southeast Asia are more inclined to enhance cooperation and their competitive positions by joining alliances or becoming shareholders and investors in other carriers.

EBR – EVA Air is part of the Evergreen Group, a large scale group of companies that includes shipping, even a charity foundation. How does the company cope with the new global standards after the economic recession?

Mr. Lin - Due to the sluggish global economic recovery, the airline industry faced a harsh environment in 2009. Strong stimulus packages from governments around the world have led to a significant recovery in 2010. However, the situation is still uncertain. We have to proceed with caution and be prepared to face challenges the future will bring. In addition to aggressively expanding markets, strengthening business management and applying strategic cost and risk controls, we are continuing to support steady growth in our direct cross-strait flight business. We developed marketing agreements with this year’s World Expo in Shanghai and Taipei Flora Expo and are bullish about the results. We are confident that, with effective business strategies such as those we’ve employed and our clear focus on service and safety, EVA will both survive the challenges ahead and continue to thrive.

EBR – Are there any actions taken by EVA Air to address environmental challenges that contribute to climate change?

Mr. Lin - EVA launched a website in March 2010 that outlines environmental measures we’ve initiated to reduce impacts of our global passenger and cargo services. We designed it to give travelers and airfreight shippers information they can use to make informed decisions about the carrier they choose. Our website also features simple actions individuals throughout the company have adapted to their daily routines. This website, which emphasizes Carbon Dioxide (CO2) and waste reductions, is located at http://eco.evaair.com/english/  

EVA and our subsidiary companies are reducing CO2 emissions, cutting noise, conserving resources and managing wastes to promote a greener, healthier earth with ongoing measures adopted throughout our offices and operations worldwide. We are replacing paper with electronic services and functions in our operations and offices. We provide e-ticketing for passengers and e-freight for shippers. Our Audio Video On Demand (AVOD) entertainment system now includes e-books and literature. Our pilots use Electronic Flight Bags instead of carrying cases stuffed with printed manuals and employees companywide rely on digital documents.

In 1995, we were one of the first airlines to initiate nonsmoking flights worldwide. And in 2000, EVA Air Sky Catering earned ISO14001 certification for meeting the highest environmental standards.

In 2009, we cut electrical use in our buildings by 3,131,899 KWH from 2008, reducing CO2 emissions by an amount equal to planting 166,251 trees. We also saved 20,779 tons of water over the previous year, the equivalent of planting 358 trees. We recycled 232,000 kilograms of used material, 25,015 kilograms of cooking oil and 1,398,880 kilograms of food waste. We also established a Fuel and Emission Reduction Committee (FERC), resulting in a pattern of achievements such as improved flight-crew operations, more efficient flight routes, aircraft weight reductions and fuel-saving loading procedures. Comparing 2009 to 2008, EVA reduced jet-fuel use by 5,380 tons and cut CO2 emissions by 16,947 tons, comparable to planting 1,412,250 trees. We also encourage our employees to adopt simple, everyday practices such as turning off lights, saving water by making sure faucets are completely turned off after use, setting computers to default to screen savers and taking the stairs.

In addition, we’ve chosen one of the quietest, most fuel-efficient aircraft available, the Boeing 777-300ER, to be the backbone of our fleet and serve long-haul routes. As an example of this aircraft’s efficiency, EVA’s 777-300ERs use an average of 34.1 percent less jet fuel on a typical Taipei - Los Angeles flight than comparable aircraft.

From 2006 through 2009, we have taken environmental steps that, combined, have reduced CO2 emissions by approximately 114,721 tons and provided the estimated air quality benefits of planting 9.6 million trees. And we are continuing to develop and adopt environmentally responsible measures in every area of our operations, from equipment design to routine everyday practices.