TransAsia Airways Corp (復興航空) yesterday said it is to dissolve the company after its attempts to keep it afloat failed.
The company looked at options, including a sale, restructuring and capital injections, during three meetings between its board of directors and industry experts, TransAsia Airways chief executive officer Liu Tung-ming (劉東明) told a news conference at the Taiwan Stock Exchange.
“Despite our best efforts to devise a new business model, the company could not produce an effective turnaround plan to repair its deteriorating finances,” Liu said.
Photo: CNA
The airline said it is unable to repay US$75 million in European convertible bonds due on Tuesday next week.
The company’s net worth was estimated at about NT$5.44 billion (US$170.29 million), or a book value of NT$7.17 per share, as of the end of last month, TransAsia vice president Chen I-chieh (陳逸潔) said.
The airline operated 27 routes in Taiwan, China and the rest of Asia, each representing about a third of total sales, Chen said.
Photo: Lee Chung-hsien, Taipei Times
In the first three quarters, the company racked up losses of NT$2.2 billion, Liu said.
TransAsia chairman Vincent Lin (林明昇) blamed the declining number of Chinese visitors, as well as rising fuel prices and a strengthening US dollar, for the company’s steep losses.
TransAsia’s load factor had fallen to about 60 percent, which was well below its domestic peers’ and unsustainable, Lin said.
TransAsia shares are to resume trading today following yesterday’s suspension, but trading would be conducted on a full-cash delivery basis, the Financial Supervisory Commission (FSC) said.
At a news conference held jointly with the heads of government agencies yesterday, the Cabinet said that the impact of the airline’s closure would be limited and the company has enough cash to refund customers and cover severance pay.
An estimated 100,000 travelers are affected by the unexpected folding of the nation’s first commercial airline, but other carriers have capacity to take on passengers booked to fly with TransAsia as it is the off-season, Civil Aeronautics Administration (CAA) Air Transport Division director Han Chen-hua (韓振華) said.
TransAsia has created a trust fund to ensure that customers get a full refund on booked flights, and the company will not dismiss ticketing and customer service staff until Dec. 20, so that they can assist in the transfer of passengers to other airlines, the firm said.
The CAA formed a special task force immediately after TransAsia announced a temporary suspension of operations on Monday to ensure that travelers’ rights are protected, Fan said.
The CAA is to impose a fine of between NT$600,000 and NT$3 million on TransAsia for halting flights without seeking prior approval.
The CAA has conducted regular financial inspections on TransAsia, and the company still holds more than NT$1 billion in cash and is not facing an immediate financial crisis, Han said.
TransAsia has 1,735 employees and they are covered by labor insurance, while there is NT$310 million in the company’s pension fund account, Deputy Minister of Labor Kuo Kuo-wen (郭國文) said.
“The money is more than enough to pay employees’ pensions and the remaining amount can be used to cover severance pay,” Kuo said.
The FSC and prosecutors have launched an inspection into possible insider trading in the company’s shares, and it has yet to be determined whether company executives were involved, commission vice chairman Huang Tien-mu (黃天牧) said.
The Taiwan Stock Exchange on Aug. 15 listed TransAsia as financially unstable, to warn investors of the risk involved in trading the company’s shares, Huang said.
GEARING UP: An invasion would be difficult and would strain China’s forces, but it has conducted large-scale training supporting an invasion scenario, the report said China increased its military pressure on Taiwan last year and took other steps in preparation for a potential invasion, an annual report published by the US Department of Defense on Wednesday showed. “Throughout 2023, Beijing continued to erode longstanding norms in and around Taiwan by employing a range of pressure tactics against Taiwan,” the report said, which is titled “Military and Security Developments Involving the People’s Republic of China (PRC) 2024.” The Chinese People’s Liberation Army (PLA) “is preparing for a contingency to unify Taiwan with the PRC by force, if perceived as necessary by Beijing, while simultaneously deterring, delaying or denying
PEACEFUL RESOLUTION: A statement issued following a meeting between Australia and Britain reiterated support for Taiwan and opposition to change in the Taiwan Strait Canada should support the peaceful resolution of Taiwan’s destiny according to the will of Taiwanese, Canadian lawmakers said in a resolution marking the second anniversary of that nation’s Indo-Pacific strategy on Monday. The Canadian House of Commons committee on Canada-Chinese relations made the comment as part of 34 recommendations for the new edition of the strategy, adding that Ottawa should back Taiwan’s meaningful participation in international organizations. Canada’s Indo-Pacific Strategy, first published in October 2022, emphasized that the region’s security, trade, human rights, democracy and environmental protection would play a crucial role in shaping Canada’s future. The strategy called for Canada to deepen
TECH CONFERENCE: Input from industry and academic experts can contribute to future policymaking across government agencies, President William Lai said Multifunctional service robots could be the next new area in which Taiwan could play a significant role, given its strengths in chip manufacturing and software design, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman and chief executive C.C. Wei (魏哲家) said yesterday. “In the past two months, our customers shared a lot of their future plans with me. Artificial intelligence [AI] and AI applications were the most talked about subjects in our conversation,” Wei said in a speech at the National Science and Technology Conference in Taipei. TSMC, the world’s biggest contract chipmaker, counts Nvidia Corp, Advanced Micro Devices Inc, Apple Inc and
LEAP FORWARD: The new tanks are ‘decades more advanced than’ the army’s current fleet and would enable it to compete with China’s tanks, a source said A shipment of 38 US-made M1A2T Abrams tanks — part of a military procurement package from the US — arrived at the Port of Taipei early yesterday. The vehicles are the first batch of 108 tanks and other items that then-US president Donald Trump announced for Taiwan in 2019. The Ministry of National Defense at the time allocated NT$40.5 billion (US$1.25 billion) for the purchase. To accommodate the arrival of the tanks, the port suspended the use of all terminals and storage area machinery from 6pm last night until 7am this morning. The tanks are expected to be deployed at the army’s training
RSS