CAA revokes FAT flight routes

This marked the first time in 10 years for the CAA to retrieve domestic flight rights of a local airlines. The domestic flight routes in question include Kinmen, Matsu, Penghu, Taitung, and Kaohsiung.

Billy K.C. Chang, director general of the CAA, announced the decision last night on grounds that the FAT has failed to improve its shortcomings before June 2, as requested in an ultimatum issued by the CAA to FAT.

Chang 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 appointments of the incumbent general manager, etc. before the deadline of June 2.

Since the FAT told the CAA that the company will enjoy injection of new capital funds on June 15, the CAA didn't retrieve the firm's international flight routes last night. But if the FAT fails to have sufficient funds to support its international flights on June 15, the CAA will then take back the routes.

At the moment, FAT still operates charter flights to Palau and South Korea's Jichu Island. But CAA's Chang yesterday called for consumers not to patronize such tourist trips as promoted by some travel agencies, should they suffer losses if FAT's international flight routes are revoked.

Just five days ago, over 300 employees of the FAT rallied in front of the Legislative Yuan, petitioning the parliament to request the government to give a helping hand to the debt-ridden carrier, which has suspended its operations due mainly to serious financial troubles.

FAT's labor union also urged the China Aviation Development Foundation under the Ministry of Transportation and Communications to grant a NT$2 billion loan to FAT to help it resume normal operations.

Some 10 days earlier, the Taipei District Court rejected a corporate restructuring plan filed by the FAT due partly to its failure to make its finances transparent since filing for bankruptcy protection on Feb. 17, and partly to the fact that financial statements for the period between 2004 and 2006 and the third quarter of 2007 were not compatible with the figures provided at the time when it filed for reorganization.

FAT filed for bankruptcy protection Feb. 17 after reporting debts of NT$9.99 billion (US$322 million) at the end of September 2007. It suspended operations on May 13, unable to meet operating costs.

Insiders of the local aviation industry said that the financial woes of the FAT are too serious to fix, adding that if the government gives financial aid to the company, local taxpayers are certainly to shower criticisms on the government.

Subscribe to The China Post and save 25%. Click here

SharePrintEmail

Write a Comment

Enter your comments - 3000 characters max

Type in image code

Submit

 Receive China Post promos Respond to this email