Taipei-Transportation Minister Lin Chia-lung (???) said Tuesday the ministry is mulling the termination of Far Eastern Air Transport Corp's (FAT) civil aviation flight permit after the airline made a surprise announcement last month canceling all flights.
Lin said the ministry has received an official report from the Civil Aeronautics Administration (CAA) that recommends canceling FAT's flight permit despite the airline's petition to resume service, which argues that its announcement on Dec. 12 was the result of a misunderstanding among management.
CAA made the call based on the Civil Aviation Act, which stipulates that airlines must submit business suspension plans to MOTC through CAA for approval before going ahead, and can only suspend or terminate operations 60 days after receiving an approval to do so.
Violations can result in suspension of business or revocation of permits and a fine of NT$600,000-NT$3 million, according to the act.
FAT has a poor record in financial transparency and corporate governance, and its chairman Chang Kang-wei (???) often failed to keep his promises, Lin said, stressing that the ministry will review the case thoroughly before making a decision.
"We refuse to be held hostage by the airline," he said, aware that the cancellation of FAT's flight permit will lead to major disruptions of domestic air travel because FAT flights account for one-third of transport capacity between Taiwan and its outlying islands.
FAT will keep its permit only if it can offer evidence of flight safety and financial stability, said deputy minister Wang Kwo-tsai (???) on Tuesday.
However, the airline appears to be in deep crisis, as it reported the previous day it was unable to pay its 1,000 employees their salaries for December.
FAT indicated that its statement represented only a delay in payment and stressed that it has already found Hong Kong investors willing to bail out the company, with details expected to be finalized by the end of this week.
Even if the airline keeps its permit, it will have to undergo a series of airworthiness examinations before resuming flights, according to Wang, which effectively means a prolonged suspension period is inevitable.
To cope with traffic demand during the presidential and legislative elections on Jan. 11, as well as the Jan. 23-29 Lunar New Year holiday, the ministry has asked two other carriers operating domestic flights -- UNI Air and Mandarin Airlines -- to offer more flights and use larger aircraft, Lin said.
The ministry will also operate more ferry services or seek military assistance if needed, he said.
If FAT's permit is revoked, the MOTC will likely ask UNI Air and Mandarin Airlines to take over the routes, Lin said.
Prior to FAT's flight suspension, which was attributed to financial problems, the airline operated 62 domestic and international routes to 47 cities in Southeast Asia, South Korea and Japan.
Established in 1957, 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