Regional Taiwanese airline Far Eastern Air Transport Corp. (????) has expressed an interest in taking over and restructuring TransAsia Airways (????), which abruptly announced its closure last month due to financial problems.
Far Eastern has been in negotiations with TransAsia's creditor banks to have its takeover plan approved, and the banks are expected to meet next week to discuss the matter.
If Far Eastern is to restructure TransAsia, the consortium of creditors must agree to the airline's proposal and then ask the court to designate Far Eastern as the company that will restructure TransAsia, which was Taiwan's third largest airline behind China Airlines (CAL) and EVA Airways before shutting down.
Tseng Chin-chih (???), Far Eastern chief operating officer, said he was optimistic about the bank consortium's decision.
Tseng said it Far Eastern would have to raise NT$2 billion (US$62.41 million) in capital and get the remaining from bank loans if it wants to take over and restructure TransAsia Airways.
He said that under Far Eastern's plan to restructure TransAsia, it would change the failed airline's name but keep intact its colors and logo.
In addition, it would rehire at least 1,000 TransAsia staff at salaries identical to what they were making before TransAsia closed on Nov. 22.
TransAsia had about 1,700 employees when it ended its operations. More than 200 employees have moved on to other carriers, but more than 1,000 have yet to land jobs.
Far Eastern would also take over seven ATRs and two Airbus A321 aircraft from TransAsia's fleet, but it could face a problem over claiming TransAsia's old flight routes.
The Civil Aeronautics Administration said Saturday it respected Far Eastern's bid to restructure the airline but stressed that it would continue to re-assign TransAsia's flight routes as scheduled. It said other carriers were now coordinating the matter of flight routes.
Before disbanding, TransAsia operated 27 cross-strait routes, 12 international routes and six domestic routes.
The government has asked CAL to operate all of TransAsia's domestic and cross-strait routes until Feb. 15.
TransAsia's domestic routes have been taken over by CAL subsidiary Mandarin Airlines but negotiations with China are still needed before CAL takes over the cross-strait routes during the next two months.
The international routes served by TransAsia are open to all airlines, and any local carrier can apply for them if they so desire.
The CAA expects to complete the re-assignment of both domestic and cross-strait routes by the end of this year, and they will be operated by new carriers beginning Feb. 16.
TransAsia previously served 13 destinations in China, with Shanghai expected to be the most coveted by other airlines after Feb. 15, and Chongqing, Hangzhou, Xiamen and Fuzhou also expected to garner interest.
According to Tseng, Far Eastern hopes to take over all of TransAsia's routes, but he said the domestic routes were most urgent because the restructured airline intends to focus heavily on the destinations of Hualien, Kinmen and Penghu (Magong).
He said flight routes are the lifeline of an airline and noted that if the restructured carrier could not regain the Shanghai route, it would have an adverse impact but would not break the deal.
"The strategy of Far Eastern will be different from China Airlines and EVA Air," Tseng said, with the restructured airline to focus on second- or third-tier cities. "The markets will be clearly differentiated," he said.
Far Eastern hopes to revive domestic momentum as quickly as possible, Tseng said, and the air operator certificate (AOC) still held by TransAsia would qualify the restructured carrier to undertake repairs and maintenance, ground operations and catering services related to the aviation industry, making a quick transition possible.
Far Eastern, which flies primarily domestic routes, has itself experienced financial problems and at one point had to stop flying in 2008.
Tseng said it took the airline three years to restructure the company before it resumed operations in 2011.
But the situation is different now, he said, and hoped the airline's past experience with restructuring would help it win "the race against time" to take over TransAsia before the expiration of its license and departure of its staff.
Source: Focus Taiwan News Channel