Taiwan's China Airlines says pilot quarantines to hit freight operations

A passenger jet of Taiwan's China Airlines at Taipei Songshan Airport in Taipei,

TAIPEI (Reuters) -Taiwan's largest carrier, China Airlines Ltd, said on Tuesday that the quarantining of its pilots to stem a COVID-19 outbreak is expected to affect more than 10% of its freighter capacity, potentially affecting the island's chip exports.

Taiwan has kept the pandemic under control thanks to early prevention, with only sporadic domestic cases, but since last month it has been dealing with an outbreak linked to China Airlines pilots and an airport hotel where many of them stayed. There have been 35 confirmed infections so far in the outbreak.

The government announced on Monday it would quarantine for 14 days all the airlines' pilots to stem the spread of the infection.

In a statement, China Airlines said it was cooperating with the government's instructions and would gradually quarantine its crew in groups, adding that it would try as hard as possible to maintain services and was not grounding the whole fleet.

"At present the initial estimate in that around more than 10% of freighter capacity will be affected, and the schedule is still being adjusted," it added.

Taiwan has a trade-dependent economy and is a major producer of semiconductors, whose supplies are already tight, affecting a range of industries from cars to consumer electronics.

Yuanta Investment Consulting Corp analyst Woods Chen said that chip exports could be affected.

"Air freight is mainly for the transportation of high value-added products such as technology products, and the biggest impact would be on Taiwan's chip shipments," he said.

Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world's largest contract chipmaker, did not respond to requests for comment.

Another major Taiwanese chipmaker, United Microelectronics Corp, told Reuters it saw no impact from the flight disruptions. It did not elaborate.

China Airlines' stock closed 3.1% lower on Tuesday, largely in line with the broader market, which ended 3.8% weaker on investor concerns over the surge in COVID-19 cases in Taiwan.

(Reporting by Ben Blanchard; Additional reporting by Jeanny Kao; Editing by Kim Coghill, Gerry Doyle, Sherry Jacob-Phillips and Giles Elgood)