Taiwan's second largest airline, EVA Airways Corp. has posted its biggest loss in this last quarter ending in June since the 2003 Asia SARS outbreak due to dramatic increases in jet fuel prices.

The second quarter loss was larger than expected, at NT$ 1.07 billion compared to the corresponding time last year which resulted in a profit of NT$ 53 million.

The large loss was blamed on the carrier not hedging fuel costs with high enough increases in fuel surcharges. Fuel costs hit a record high on the 8th of August and EVA was not the only airline reporting a loss due to small fuel surcharges.

Rival airline China Airlines also posted a NT$ 257 million loss, whilst Cathay Pacific Airways Ltd., due to their successful fuel hedging policies, has remained profitable.

Peter Tzeng, an analyst at Polaris Securities Co. said, "Their earnings were all taken away by oil producing countries."

Nieh Kuo-wei said that fuel made up about 40% of the company's operating costs, whilst the company hedged about half of those costs.