However, machinery and electrical equipment sales expanded 16 per cent to nearly $11 billion, including a torrid 44 per cent growth in exports of informatics and telecommunications products to $1.1 billion.

Eva Airways cargo division deputy senior vice-president Bruno Chang said: 'In the past few months through to the end of March, we have often not had enough capacity for outbound shipments from the Far East to the United States West Coast, but haven't been able to reach 100 per cent load on return flights to the Far East.' He said load factors from Los Angeles, which mostly ships consumer products to Asia, had fallen about 20 per cent, but remained high on return flights from San Francisco, a prime centre for computer parts and components.

The instability of key Asian currencies, such as the South Korean won, since the second half of last year had led buyers in the US and Europe to be more cautious and reduce the time lag between the placing of orders and delivery times.

He said Eva had not yet adjusted its cargo schedules between Asia and the US West Coast or Europe, partly because export volume from Asia, including Taiwan, in electronics products remained brisk.

'Taiwan's exports of informatics and telecommunications products remain strong, and US buyers have shifted some orders from Korea to Taiwan,' Mr Chang said.

'As we are a Taiwan-based carrier and have no flights through Korea, the net impact is favourable for Eva.' Nor were there signs of a slowdown in Eva's plans to expand its all-cargo fleet. Eva took delivery of a fifth MD-11 jet freighter in early January and would receive two more in October and November to bring its all-cargo fleet to seven planes by the end of the year. Two more MD-11s would be delivered in July and August next year.

Last year, cargo accounted for 33 per cent of Eva's estimated $1.3 billion in gross revenues as total freight carried rose almost 15 per cent to 314,782 tonnes.

Mr Chang said with the added capacity of two new MD-11s, this share could approach 40 per cent of total sales, which securities analysts forecast might climb to $1.5 billion this year.

Mr Chang said the carrier would continue the planned expansion of its cargo fleet, which now had seven MD-11 freighters and 10 combination passenger-cargo carriers.

He said: 'We will continue to add capacity as our market analysis is still favourable in many areas despite the Asian financial crisis.

'As with marine shipments, freight rates to the United States, for example, are higher than inbound, and as outbound shipments remain strong, we can maintain positive growth in revenues.' Mr Chang said, however, that Eva had not made a decision on the final three freighters in the expansion plan.

'So far we have relied on MD-11s with modest carrying capacities between 75-80 tonnes while building the airline's cargo network, but we are now considering whether to use bigger freighters or serve our customers by providing more frequent service with smaller aircraft,' he said.

In any case, the increased number of all-cargo aircraft would facilitate plans to use freighters as the main force in long-haul, trans-Pacific or European routes instead of combination flights.

Last year, Eva's five MD-11 freighters operated 15 long-haul flights weekly, 12 of which were to the US and three to Europe, as well as nine freighter flights between Southeast Asian cities such as Penang, Singapore and Manila, and Taipei and Kaohsiung.

Mr Chang said Eva would increase the frequency of cargo flights to Brussels and Amsterdam 'as we have not yet fully utilised our air rights' and hoped to fly soon to London. At the end of March, Eva replaced an MD-11 passenger with capacity of 18-20 tonnes with a B747-400 combination jet able to carry up to 40 tonnes for the Amsterdam service.

He said: 'The US is the most important market as cargo in and out in most gateways, including places we don't yet fly to such as Dallas and Miami, is bigger than any country in Southeast Asia.' Besides opening a service to Osaka International Airport on April 1 and full cargo service to Chicago on January 8, Eva planned to offer cargo space on a new passenger service between Kaohsiung and Los Angeles in June using its newly delivered B747-400 passenger jet.

'We will become the first carrier to link Kaohsiung and the United States, and we believe that this market can be developed through opening this service,' Mr Chang said.

Kaohsiung's potential as a source of air cargo would rise rapidly in the future when semiconductor and other electronics factories in the new Tainan Technological Industrial Complex (TTIC) entered production in coming years.

Mr Chang said, however, that Kaohsiung International Airport was limited by its small 50,000-tonne warehouse capacity, its prime role as a domestic passenger hub and curfew restrictions imposed by its location within Kaohsiung City.