bzcat

They must have secured some unbelievable lease rate. These extra 339 and A321 were going straight to the desert for storage if Starlux didn't agree to take them.

But I'm struggling to see where they will use all these planes.

Covid may have ironically left Starlux with more cash and in better position to stay afloat then other airlines. The planned rapid expansion didn't happen so a lot of money were never spent. It's a gamble to expand the fleet now but let's see how this will play out. Maybe K Chang believe either CI or BR will eventually go bankrupt - seems unlikely Taiwan Govt will let either one go under without some sort of bail out but you never know.

coolfish1103

I can see them securing great deals but I don't think the pandemic is ending anytime soon so I feel the fleet expansion is unwarranted. I wouldn't invest in this company base on what's on the table now.

Not really, base on the half year reports of 2020, Starlux is taking as much losses as China Airlines. If we include Mandarin Airlines then 0.3 billion less. I don't think Starlux is going to have more cash if this trend continues. China Airlines will eventually make money this year from pure Cargo operations, but that's not the case for Starlux with their 3 321.

If we include Tigerair Taiwan into the equation then China Airlines group are just as bad as EVA in terms of 2020. As for EVA, since it does not have as much cargo planes as China Airlines so I expect them to make losses this year. The best they can do is make sure the remainder of the year remain positive.

The government is aiding all airlines to keep the staff. Even if government decides to stop bailing them out, I think both BR/B7 and AE/CI can survive on it's own by severing reducing passenger related jobs. IT and JX will be more complicated, though.

-1.83 billion EVA Airways
-1.31 billion China Airlines
-1.31 billion Starlux
-0.57 billion Tigerair Taiwan
-0.34 billion Mandarin Airlines
-18.4 million UNI Air

username

I first thought maybe the TW reporters got confused between 359 and 339...I don't quite understand it either.

He does come across as very arrogant and his language is inappropriate at times. However, at least he treats his employees well and is well liked by them, so I see in the media.

Their network is not big enough to have transit traffic and the TW COVID transit rules only allow same-airline group (i.e. BR/B7, CI/AE) connections. Without transit traffic or cargo, they are in a really bad situation.

steveintaichung

Arrogane is the biggest killer in Asian business. Especially from the born with a golden spoon in the mouth generation he comes from.

username

They announced they will start TPE-NRT, TPE-BKK and TPE-KIX starting December. 2x per week each: https://www.starlux-airlines.com/en-...0-5ea4834858e6

Zorak

via the blogs, status match good for 4 (!) years: https://www.starlux-airlines.com/en-.../CardTierMatch

coolfish1103

It's been there since last year but you don't have any use of it especially during a pandemic.

Zorak

Ah, indeed, I should have just gone back further in the thread

username

They applied to the TW government for the following US routes - for the purpose of exploring only:

LAX, ONT, SFO, SJC,
SEA,
JFK, EWR, BOS, IAD,
IAH, DFW, ORD,
MIA,
GUM, HNL

https://udn.com/news/story/7934/4998333 is the original report in Chinese. The spokesperson made it sound really preliminary.

Earliest is mid 2022. They said previously LAX is first priority. Let's see which other ones come true. Bold ones are those never had regularly scheduled passenger service by TW carriers. AA did SJC-TPE for a while.

coolfish1103

More like news created for attention. At least the flights for Japan had a schedule (bar OKA).

maxc_20

I'll say LAX/ONT/SFO/JFK or EWR will happen first. IAH and ORD have huge potential as well. For routes not served by any Taiwanese airline, I'll say IAD, DFW, and MIA is the most likely, probably 2 out of 3 will happen. The market for HNL isn't that big, CI only have like 3 weekly before the pandemic. For GUM, it's possible but with A321neo

The routes that certainly will be launched on Dec 1 like BKK, KIX, and NRT are on sale already, while OKA launch is not certain yet. As for publicity reason, typically airlines don't really tell when they apply for slots but there aren't any good travel related news in a while so it'll be good publicity to do one.

bzcat

GUM is likely to happen when Taiwan lifts outbound COVID travel restriction/advisory. HNL non-stop is probably not going to work.

Since they won't have much of a transit or connecting business, they will be focused on O&D pax and cargo to North America so LAX and SFO are guaranteed when the A350 arrives. I don't think they will go to ONT and SJC, at least not in the first wave because they'll want to be in the mix for cargo and that means it has to be LAX and SFO.

DFW and BOS have no direct competition so those will be interesting option. Both have some decent size O&D already so could grow into real business if they can stimulate additional travel after COVID. I'd put them in the 2nd wave targets. These two markets are similar to IAH and SEA before BR launched non-stop flights to those markets.

MIA is beyond economic payload range for Starlux's A350 so it's not happening unless it is a tag from Canada. IAD is more like ORD... it will depend on connecting traffic so not likely soon.

JFK/EWR is going to be tough nut to crack. I think Starlux will want to give it a go but I don't think it should be on their first wave target list.

east_west

Has there been speculation on fares? LAX/SFO-TPE are quite competitive and BR/CI are both top notch airlines with loyal customer bases. UA isn't a top notch airline, but has a global network, FF program, and corporate contracts. Is the assumption that Starlux will undercut on price? Will their labor costs be that much lower to allow this to be sustainable?

I think looking at under-served markets -- DFW/BOS/IAD and SJC for the large South Bay population may make more sense than trying to win a price war with BR/CI/UA. Possibly PHX (#10 US metro and TSMC has a new major investment in AZ), MIA, or ATL.

bzcat

Fare has to be cheaper or the FF program has to be much richer at the beginning. Either way, it will cost money to buy market share and I don't expect Starlux to make money on passenger ops to North America for a while. This is why cargo will be important.

Focusing on under-served market is obviously a good way to avoid head on competition with CI and BR. SJC passenger ops volume and projected revenue probably looks pretty good but I wonder about cargo compare to SFO. It's going to be a really tough call I think. Also SJC has curfew and aircraft size restriction so it has some limitations that are hard to overcome. SJC/DFW/BOS/IAH were all on BR's radar at one point so I'm sure K Chang and his team have good idea on how the market size and potential.

PHX O&D is too small to support non-stop to TPE, even with TSMC investment. It's much more efficient to serve PHX via connection at LAX or SFO. Starlux should work out some codeshare arrangements with Alaska or American if it wants to be in the US-side connection business.

username

The TSMC plant in PHX is definitely would not be a consideration - even if it brings a lot of suppliers. If AA shifts capacity from PHX to LAX, why would JX fly to PHX? (Interesting fact, BR operated KHH-PHX once transporting the LA Dodgers back fro TW to spring training.)

I guess there is no way for JX to get into OneWorld since Cathay would object?

I guess Canada is not being considered because of the bilateral agreement? Not that BR or CI has made much money on YYZ/YVR.