CAA suspends int’l flight routes of debt-ridden FAT

But the CAA also decided to allow the FAT to apply to resume regular international flight routes as long as the company can settle the demerits within six months. Billy K.C. Chang, director general of the CAA, said the FAT should clear due salary payment to over 1,000 employees, settle airplane leasing disputes, improve the insufficiency of cash flow amount, and tackle illegal appointment the incumbent general manager, etc.

If the FAT fails to settle the issues within six months from now, the CAA will submit a proposal to the Ministry of Transportation and Communications (MOTC) to officially revoke the operating licenses and international flight rights granted to the FAT in accordance with the Civil Aviation Law, according to Chang.

CAA officials also noted that it has been more than one month since the FAT suspended its domestic and international flights on May 13. But if the FAT can make its financial statement transparent, smoothly raise funds and work out sound operating plans to avoid recurrence of unexpected suspension of flight operations, then FAT can apply to resume all the firm’s regular flights, or to operate charter flights.

The officials continued that FAT owed its over 1,000 employees 1.9 months of regular salary, but has failed to come up with an effective solution over the past month, forcing employees to take to the streets.

The CAA will continue joining forces with the Council of Labor Affairs to safeguard the interests of employees.

In response to the CAA’s decision to suspend FAT’s international flight routes, the firm’s spokesman Lee You-teh said that the company fully respects the CAA’s decision.

On another front, the labor union of the FAT yesterday afternoon filed a restructuring proposal to the Taipei District Court.

Chen Kuo-liang, chairman of the FAT labor union, said that the corporate restructuring program is designed to facilitate negotiations between the FAT and its creditor banks over repayment of overdue loans.

Under the program, all the existing directors and supervisors will see their rights suspended, and the district court will appoint suitable managers to station in the FAT.

In response, CAA’s Chang said that CAA will support the restructuring plan and will offer relevant assistance if needed.

On June 2, the CAA decided to revoke five domestic flight routes from the debt-ridden FAT, marking the first time in 10 years for the CAA to repeal the domestic flight rights of a local airline.

The debt-stranded airlines filed for bankruptcy protection Feb. 17 after reporting debts of NT$9.99 billion at the end of September 2007. It suspended operations on May 13, unable to meet operating costs.

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