Government won't assist air carriers

Minister of Transportation and Communications Lin Lin-san (林陵三) said he believes that the nation's four domestic airlines will be able to merge into two companies without government assistance.

This comes as senior airline executives are urging the government to assume the overall responsibility for downsizing the industry, which is suffering from chronic overcapacity problems.

Lin told a local radio station that he was confident that mergers in the sector could be achieved, but that the ministry had no plans to actively encourage such actions.

Acknowledging present difficulties in the industry, Lin said the government has created preferential conditions on fuel sales and airport service charges.

TransAsia Airways (復興航空), Far Eastern Air Transport Corp (遠東航空), Mandarin Airlines (華信航空) and Uni Air (立榮航空) were unable to operate profitably last year.

Although the airlines seem willing to merge, the lack of profits have made all of the companies undesirable partners.

This has led senior executives such as Chang Yung-fa (張榮發), whose Evergreen Group (長榮集團) manages Uni Air, to urge the government to step in an coordinate the overall downsizing of the troubled industry.

In recent years, local air carriers expanded their fleets in anticipation of direct air links with China. Lin said China still refuses to refuse to discuss the links issue with Taipei.

The government opened direct links between Taiwan's outlying islands and China on a trial basis last January, but the scheme has foundered.

Lin replaced Yeh Chu-lan (葉菊蘭) as transportation minister in January. Yeh now serves as chief of the Council for Hakka Affairs.