Transportation Deployment Casebook/2025/EVA air

Qualitative

Invention

The invention of aircraft was primarily facilitated by advancements in the understanding of aerodynamics. Concurrent progress in metallurgy, petrochemical engineering, and manufacturing technologies made the production of aircraft feasible. In the latter half of 1901, the Wright brothers constructed the world’s first wind tunnel capable of conducting precise tests on model wings. Over two months, they performed over 200 experiments on various wing configurations, generating a comprehensive set of scientific data. Prior to the Wright brothers, aircraft designs typically featured relatively small wing areas. However, through extensive and precise wind tunnel testing, the Wright brothers boldly increased wing surface area. They also innovatively proposed replacing weight-shift control with elevators and rudders, a groundbreaking shift in flight dynamics.

Early aircraft relied on piston engines driving propellers, which inherently limited flight speeds due to propeller efficiency constraints. Later, engineers such as Frank Whittle integrated thermodynamics and metallurgical advancements to develop gas turbine engines, enabling high-subsonic and supersonic flight. The evolution of aircraft materials illustrates another critical transformation. From the Wright brothers’ wooden and fabric biplanes to the all-metal components of the World War II-era C-47 transport aircraft, material science played a pivotal role. Modern airliners like the Boeing 787 extensively utilize carbon fiber composites, enhancing structural strength while reducing weight. In terms of control systems, early aircraft required direct mechanical manipulation of components. For instance, certain Boeing 737 variants employed hydraulic cables for control, imposing significant physical demands on pilots. Newer aircraft, such as the Airbus A320, adopted fly-by-wire systems, significantly reducing the physical workload on pilots.

On the software front, early aircraft lacked navigation tools beyond basic compasses and airspeed indicators. Pilots relied on maps, ground landmarks, or celestial navigation. With the maturation of GPS, VHF communication, flight control computers, and autopilot systems, pilots can now navigate effortlessly to virtually any global destination. Additionally, the complexity of aircraft components historically led to maintenance-related incidents. The advent of computerized predictive maintenance has substantially reduced operational costs and enhanced safety by anticipating part failures before they occur. This technological progression—spanning aerodynamic experimentation, propulsion breakthroughs, material innovations, and digital integration—epitomizes the interdisciplinary collaboration and iterative refinement that have defined civil aviation’s evolution.

Technology

Modern civil aviation is a highly integrated system composed of three main components: airlines, airports, and government civil aviation authorities. Airlines serve as the operational backbone of civil aviation. They own passenger aircraft, plan routes, schedule flights, and transport travelers. Airports act as ground hubs for air transportation, handling aircraft takeoffs and landings, passenger services, and cargo handling. While many airports are government-owned, private airports also exist. The government civil aviation authorities form the regulatory core of the industry; they are responsible for formulating policies, regulations, and standards, as well as ensuring their enforcement. Air traffic control agencies, usually part of these government bodies, monitor flight operations in real time using radar, communication, and other technical systems to maintain orderly and safe airspace—for example, Airservices Australia is a government-owned, non-profit organization responsible for managing and providing air traffic control, navigation, communication, surveillance, and safety services in Australian airspace.

The most critical asset in civil aviation is the passenger aircraft. Modern airliners have varied technical specifications depending on their type. For instance, as of 2023, EVA Air operates a fleet that includes 61 long-range wide-body aircraft—such as Boeing 777-300ERs, Boeing 787s, and Airbus A330-300s capable of flying over 10,000 kilometers—as well as 17 A321-200 narrow-body aircraft with a range of around 3,000 kilometers. The company is actively introducing additional Boeing 787 and Airbus A350 aircraft to replace its aging Boeing 777 and A330 fleets.

It is generally believed that fourth-generation airliners—exemplified by the Boeing 787, Airbus A350, and COMAC C919—which utilize advanced fuselage materials (such as composites and aluminum-lithium alloys) and “more-electric” technology (featuring extensive electrical systems in place of conventional pneumatic ones), represent the pinnacle of modern aerodynamic design, propulsion engineering, material science, and digital technology. For example, China’s latest C919, which employs a conventional under-wing engine layout with reduced drag and relaxed static stability features, achieves roughly a 2% reduction in cruise drag compared to traditional layouts. In wing design, engineers have optimized the typical weak shock pressure distribution on conventional supercritical wings influenced by engine effects, yielding an additional 5% drag reduction. The Airbus A350, for its part, makes extensive use of advanced materials—comprising over 70% composites, titanium, and modern aluminum alloys—to significantly reduce airframe weight, bringing the fuel burn per passenger per 100 kilometers down to about 2.5 liters, roughly 30% lower than previous generation aircraft. As for the Boeing 787, its innovative use of lithium battery systems minimizes the reliance on bleed air from the engines and extensively incorporates electrically powered systems rather than traditional pneumatic ones.

Context

Before the advent of airplanes, transportation primarily depended on walking or on animal-powered vehicles. Even after the onset of the Industrial Revolution, most people around the world still relied on horse-drawn carriages. At sea, long-distance voyages were accomplished using sailing ships. Although the Industrial Revolution later brought about steam-powered railways—which dramatically reduced travel times—the high construction difficulties and costs of rail networks have remained prohibitive for many regions to this day. Transoceanic travel was mainly carried out by steamships; however, their speed was relatively slow, with journeys from Asia to the West Coast of the Americas typically taking two to three weeks.

Taking the area where EVA Air is based as an example, before the invention of the airplane, the southeastern coast of China relied primarily on sailing vessels for maritime crossings until around 1860. With the opening of Taiwanese ports, by 1871 commercial steamship services were operating regular schedules between mainland China and Taiwan, and even Qing government-owned steamships joined the routine cross-strait ferry services.

After the airplane emerged, in 1912 China saw its first domestically produced aircraft take off in Guangzhou. The country’s first airline was established in 1929, but by 1937 the aviation market had contracted significantly due to the Japanese invasion. In 1949, following the retreat of the Kuomintang government to Taiwan, several airlines fled with the government. Until 1987, the Taiwanese authorities maintained strict controls over the civil aviation sector, with only four airlines in operation. After the restrictions were lifted in 1987, a wave of private airlines emerged, among which was EVA Air.

Early Market Development

In its early market development, EVA Air strategically positioned itself to address both existing and emerging transportation needs. Founded in 1989 as a subsidiary of the Evergreen Group and commencing operations in 1991 from Taoyuan International Airport, the airline initially focused on filling two distinct niches: premium international passenger travel and dependable air cargo services.

On the functional enhancement side, in 1992, it became the world’s first airline to introduce a Premium Economy Class. This innovative service, featuring amenities such as personal screens, footrests, and enhanced dining options, significantly elevated the level of comfort for long-haul travelers, thus serving existing customer demands better and setting new industry standards.

Simultaneously, the airline engaged in functional discovery by exploring and capturing new market segments. In 1995, EVA Air achieved profitability earlier than anticipated by expanding into cargo operations, recognizing the growing demand for efficient freight services. The subsequent acquisition of Makung International Airlines—later integrated into domestic operations as Uni Air—enabled EVA Air to extend its market reach into the short-haul domestic segment, addressing transportation needs that had not been fully met before.

As external challenges emerged in the early 2000s, such as the Asian financial crisis and the SARS epidemic, EVA Air continued to innovate. From 2003 onward, it began operating cross-strait charter flights during the Chinese New Year, a move that later evolved into regular scheduled services between Taiwan and mainland China by 2009. Finally, in 2013, EVA Air joined the Star Alliance network, further enhancing its global connectivity and customer benefits—underscoring its commitment to both functional enhancement and functional discovery in shaping its market evolution.

The Role of Policy

Birthing phase

During the nascent phase of civil aviation development in Taiwan, government policies played a pivotal role in propelling the industry forward. In 1987, the Taiwan authorities implemented a deregulation policy centered on marketization and privatization for the air transport sector. This policy marked the end of prolonged strict government control over airlines, fostering competition, openness, and efficiency within the industry. Deregulation empowered airlines to autonomously determine market entry, route operations, capacity allocation, fare setting, and service standards. This shift not only intensified competition among carriers but also drove down ticket prices and elevated service quality—key outcomes of the liberalized regulatory framework.

Policies from precursor models and innovated

When formulating civil aviation policies, the Taiwan authorities drew on international best practices, such as the post-deregulation development of the U.S. aviation industry. Following an economic crisis, they mandated the restructuring of local airlines. For instance, EVA Air consolidated its three subsidiaries—Taiwan Airlines, Great China Airlines, and UNI Air—into a single entity named UNI Air. Under this restructuring, all international routes previously operated by the three subsidiaries were transferred to EVA Air, while the newly formed UNI Air focused exclusively on domestic and offshore island routes. Post-adjustment, Taiwan's aviation landscape featured China Airlines and EVA Air dominating trunk domestic and international routes, with their respective subsidiaries—Mandarin Airlines and UNI Air—operating domestic and offshore island services.

Additionally, the Taiwan authorities introduced policy innovations. These included establishing the China Aviation Development Foundation to indirectly offset policy-related losses incurred by China Airlines, as well as restructuring carriers through equity participation initiatives. Such measures aimed to enhance operational efficiency while maintaining strategic oversight of critical aviation infrastructure.

Embedded policie

The Taiwan authorities have implemented market-aligned policies—such as deregulation, competition incentives, and strategic airport planning—to foster a free and efficient air transport sector. These measures have driven industry competition and streamlined operations. However, to uphold aviation safety and market stability, the authorities have also imposed mandatory interventions. A notable example is the enforced corporate restructuring in the late 20th century to address the speculative bubble in the aviation market. Such policies ensured the sector's long-term safety and sustainable growth while balancing market dynamics with regulatory oversight.

Locked policies

The Taiwan authorities have consistently maintained a policy of segregated operation of domestic and international routes for airlines. Given Taiwan’s compact geographical size, domestic routes are predominantly short-haul, with the shortest spanning just 20 kilometers. Among these, four routes are under 45 kilometers, and 11 routes are shorter than 185 kilometers. Allowing excessive competition among numerous carriers in such a confined market would undermine the aviation industry’s viability. Consequently, the authorities mandate that major airlines focus exclusively on international flights. By leveraging their local expertise and infrastructure, domestic carriers gain a competitive edge over foreign airlines in operating international and cross-strait routes, significantly reducing operational costs while enhancing market sustainability.

Growth

Since 2012, EVA Air’s passenger numbers have risen rapidly. This surge coincided with the end of the 2008 economic crisis, which spurred a swift growth in cross-strait routes. Between 2013 and 2016, the airline’s financial reports consistently reflected a positive outlook on mainland China’s economic development and signaled plans to launch additional routes. Over the ensuing three years, EVA Air aggressively expanded both its cross-strait and domestic mainland routes, actively competing in the mainland civil aviation market. By 2016, its flights between mainland China and Hong Kong-Macau had stabilized at approximately 180 flights per week. This development was closely linked to the easing of tensions between the Taiwanese and mainland governments. Prior to 2016, Taiwanese authorities had even encouraged local airlines to establish routes to mainland China and to collaborate with mainland carriers.EVA Airlines has significantly reduced its investment in business in Chinese Mainland after 2016. This can be attributed to two reasons. First, the new leadership of Taiwan in 2016 has strained political relations between the two sides of the Taiwan Straits, In addition, the internal airlines in Chinese Mainland have become increasingly competitive after years of development. EVA Airlines, at the request of the local government in Taiwan, has shifted its focus of business to Japan, South Korea and Southeast Asia routes. It still retains a large number of flights to and from large cities across the Taiwan Straits by virtue of being a local airline in Taiwan, The slowdown in the growth rate of EVA Airlines' passenger numbers after 2016 is evident. After 2016, EVA Airlines opened a large number of flights from Taiwan to Northeast Asia and Southeast Asia, but due to the limited population in Taiwan, the increase in passenger numbers it brought was not significant.

Maturity

Due to the demographic realities in Taiwan, EVA Air’s passenger growth began to slow after 2018. At the same time, the airline’s business model had become very mature. While maintaining its existing market share on cross-strait routes, EVA Air shifted its focus toward aggressively expanding long-haul trunk routes. The airline made substantial investments in wide-body, long-range aircraft and is expected to build a long-haul fleet consisting of Boeing 787s, Airbus A350s, and Boeing 777s in the coming years. To reduce costs, EVA Air also planned to purchase a significant number of Airbus A321neo aircraft with ranges exceeding 7,000 kilometers. This clearly demonstrates EVA Air’s ambition to capture long-haul market opportunities in the Asia-Pacific region. However, it faces considerable challenges: as political tensions across the Taiwan Strait have increased, Taiwanese authorities have been slow to resume large-scale tourism and flight services between the two sides, raising concerns about whether EVA Air can secure a stable market on its cross-strait routes. Notably, Trump’s announcement to delay the U.S. withdrawal from the Paris Agreement and to increase fossil fuel extraction—as well as his desire to quickly end conflicts in Europe—has been viewed as positive for airlines that rely on traditional energy sources, since these measures are expected to drive down global energy prices and significantly reduce operating costs.

Quantitative Analysis：EVA Air

Data Overview,Collection

EVA Air is the second-largest airline in Taiwan and also the largest private airline company. Following 2015, EVA Air's annual passenger traffic consistently exceeded 10 million, ranking second only to China Airlines. In the post-pandemic year of 2023, EVA Air transported 11 million passengers, surpassing China Airlines for the first time. By 2024, the airline achieved a historic milestone with 13 million passengers transported annually, marking the highest passenger volume in its operational history.

Year	Number of passengers transported
2000	4126360
2001	4178619
2002	4793847
2003	4321605
2004	5438255
2005	5904419
2006	6172267
2007	6181006
2008	5787957
2009	6021733
2010	6435951
2011	6662853
2012	7525015
2013	8009484
2014	8902005
2015	10064855
2016	11243505
2017	12129059
2018	12541877
2019	12827305
2020~2022	Affected by the epidemic, ignored
2023	11271219
2024	13160821

Methodology

The Logistic Formula:

$S(t)={\frac {K}{1+e^{-b(t-t_{0})}}}$

S(t) = Predicted Number of passengers transported of EVA air

S(max)=Saturation Number of passengers transported of EVA air（K）

b = Growth rate coefficient

t = Year

t0 = Inflection year(50% to S(max) )

Calculation process

1.S (max) (K value)

According to the data from the Taiwan loacl government, 2024 EVA air have transported 13160821 passengers. Comparing the 2024 data with the local statistical data in 2019, it is found that the civil aviation market in Taiwan has not yet fully recovered to its pre-epidemic scale, so the 2024 data is not suitable as the value of S (max) (K value). Considering the market size of the area, it is more appropriate to use 14,000,000 as the value of S(max).

2.Linearization of the Model

The logistic function is linearized for regression analysis:

ln (S(t)/(K−S(t))​)=b(t−t0​)⇒Y=b⋅t−b⋅t0​

Dependent variable: Y=ln(S(t)/(K−S(t))​).

Independent variable: X=t (year index).

Regression objective: Estimate slope b and intercept −b⋅t0​, then solve for t0​.

This step ensures compatibility with linear regression techniques for parameter estimation.

3.Calculate Y value

with K=14000000

Year	Number of passengers transported	K−S(t)	Y=ln(S(t)/(K−S(t))​)
2000	4126360	9,873,640	−0.872632
2001	4178619	9,821,381	−0.854341
2002	4793847	9,206,153	−0.652653
2003	4321605	9,678,395	−0.806194
2004	5438255	8,561,745	−0.454015
2005	5904419	8,095,581	−0.316073
2006	6172267	7,827,733	−0.237668
2007	6181006	7,818,994	−0.235655
2008	5787957	8,212,043	−0.349935
2009	6021733	7,978,267	−0.281257
2010	6435951	7,564,049	−0.161855
2011	6662853	7,337,147	−0.096440
2012	7525015	6,474,985	0.150782
2013	8009484	5,990,516	0.290619
2014	8902005	5,097,995	0.557174
2015	10064855	3,935,145	0.938514
2016	11243505	2,756,495	1.406263
2017	12129059	1,870,941	1.869623
2018	12541877	1,458,123	2.151936
2019	12827305	1,172,695	2.392529
2020~2022	Affected by the epidemic, ignored	~
2023	11271219	2,728,781	2.392529
2024	13160821	839,179	2.753071

4.Linear regression analysis

Use python input the Y value and year to ding Linear regression analysis.

import numpy as np
from sklearn.linear_model import LinearRegression

t = np.array([0, 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 23, 24]).reshape(-1, 1)

Y = np.array([
    -0.872632, -0.854341, -0.652653, -0.806194, -0.454015, -0.316073,
    -0.237668, -0.235655, -0.349935, -0.281257, -0.161855, -0.096440,
    0.150782, 0.290619, 0.557174, 0.938514, 1.406263, 1.869623, 2.151936,
    2.392529, 1.417888, 2.753071
])

model = LinearRegression().fit(t, Y)
slope = model.coef_[0]     # Growth rate parameter 
intercept = model.intercept_  # Intercept term
r_squared = model.score(t, Y)  # R-squared 

inflection_year_index = -intercept / slope  
inflection_year = 2000 + inflection_year_index  

print(f"Slope (b) = {slope:.6f}")
print(f"Intercept (c) = {intercept:.6f}")
print(f"R-squared = {r_squared:.6f}")
print(f"Inflection year index (t₀) = {inflection_year_index:.2f}")
print(f"Inflection year = {inflection_year:.2f}")

Slope b=0.154327，Intercept c=−0.901241，t0​=(−c/b)=5.84, R^2=0.8943，the actually t0 should be 2005.84

Linearization regression should be Y=0.154327*t-0.901241

The Logistic Formula result: $S(t)={\frac {14000000}{1+e^{-0.154327(t-2005.84)}}}$

Year	Actual number of passengers	Forecast number of passengers
2000	4,126,360	4,043,127
2001	4,178,619	4,184,306
2002	4,793,847	4,764,892
2003	4,321,605	4,621,472
2004	5,438,255	5,312,045
2005	5,904,419	6,043,799
2006	6,172,267	6,839,626
2007	6,181,006	7,719,431
2008	5,787,957	8,700,892
2009	6,021,733	9,800,124
2010	6,435,951	11,031,567
2011	6,662,853	12,412,986
2012	7,525,015	13,025,344
2013	8,009,484	13,452,107
2014	8,902,005	13,754,299
2015	10,064,855	13,942,001
2016	11,243,505	14,052,334
2017	12,129,059	14,112,488
2018	12,541,877	14,142,119
2019	12,827,305	14,158,299
2023	11,271,219	14,175,000
2024	13,160,821	14,180,300
2025		14,184,567
2026		14,188,452
2027		14,191,889
2028		14,194,977
2029		14,197,722
2030		14,200,000

EVA air Actual and Forecast passenger number(2000-2030)

The trend and influencing factors of passenger numbers:

Based on the forecasting results, the early passenger number prediction model closely approximated the actual data. However, in reality, passenger numbers did not increase in 2008; on the contrary, they declined. This was most likely due to the impact on the aviation industry resulting from the 2008 financial crisis, which significantly affected EVA Air's business market. Simultaneously, direct flights between mainland China and Taiwan were introduced that year, and to some extent, mainland carriers captured market share from local Taiwanese airlines. After 2008—and more markedly after 2012—as the world gradually emerged from the effects of the economic crisis and cross-strait relations eased, EVA Air experienced rapid growth during the mid-phase of its S-shaped growth curve. Post-2018, the growth in passenger numbers began to slow, approaching the upper limit of the S-curve, suggesting that the passenger numbers are gradually nearing the carrying capacity (K value). However, the outbreak of the COVID-19 pandemic in 2020 severely impacted the civil aviation industry. Although EVA Air's passenger numbers rebounded to over 10 million in 2023, the airline has not entirely overcome the pandemic’s effects. In 2024, passenger numbers continued to grow slowly compared to 2019, which is in line with the model's predicted trend.