Taipei Just one day after Far Eastern Air Transport Corp. (FAT), a mid-sized international carrier, said in a surprise announcement that it had stopped operations due to financial difficulties, FAT Chairman Chang Kang-wei said Friday that the operations will restart, thanks to the promise of a fund injection.
Chang said at a news conference that the earlier stoppage announcement was made as funds to maintain operations had not yet arrived.
FAT Vice President Huang Yu-chi said Thursday that the carrier was short of about NT$30 million (US$993,377) in capital to continue its operations after years of losses and difficulties in raising funds.
Chang told reporters, however, that FAT has covered its operations without owing money, including pay for its employees, and that since funds for future operations will come next week, services should resume Friday afternoon.
Chang said that "the carrier's announcement that Friday would be the last day of employment for all employees was because the company's executives got things wrong."
"The employment contracts of all FAT employees remain valid," Chang said.
Thursday's announcement had meant that more than 1,000 FAT employees would be out of a job from Friday, while the termination of its flight operations would have affected 3,409 passengers, including 3,251 people in 120 tour groups who had already booked scheduled FAT flights for Friday or later dates, and an additional 157 who took FAT flights on overseas trips and have not yet returned home.
Due to the surprise announcement of the service termination, the airline will face a fine of up to NT$3 million imposed by the Civil Aeronautics Administration (CAA) for not meeting its flight commitments.
"Since FAT will next week secure the funds necessary for future operations, I hope the CAA will agree with the plan to resume operations Friday afternoon so that the carrier can provide services to passengers who plan to take trips during the upcoming Lunar New Year holiday," Chang said.
Chang said the funds will come from three groups of investors but did not specify who the investors are.
Prior to Thursday's announcement that it was stopping services, FAT had been operating 62 domestic and international routes to 47 cities in Southeast Asia, South Korea and Japan.
Transportation minister Lin Chia-lung said FAT must resolve its financial difficulties and deal with poor management, noting that these problems could affect flight safety.
He said the MOTC will seek a better understanding about the carrier's financial condition and had scheduled a meeting later Friday to discuss the possible NT$3 million fine.
Local media reported Friday that FAT owes NT$2.2 billion to the Taiwan Cooperative Bank.
New Power Party (NPP) Legislator Huang Kuo-chang said Friday that the loan was used to finance a leasing company owned by Chang.
The Taipei District Prosecutors Office said it has summoned Chang as part of an investigation into a possible illegal fund transfer from FAT to Chang's leasing company.
Chang has denied an accusation that he embezzled funds from the carrier.
Established in 1957, the Taipei-based FAT declared bankruptcy in May 2008 but resumed operations three years later and completed bankruptcy restructuring in October 2015.
Source: Focus Taiwan News Channel