Analysis: Local air carriers welcome new investment incentives

Taiwanese carriers have been experiencing a tough time on rising operational costs and a dull market outlook, said Janet So (湛華生), public relations manager at Transasia Airways Corp (復興航空).

Therefore, the operators would have more channels to raise capital should the foreign shareholding be raised to 49 percent, she said.

While giving approval to the government's intention to further liberalize Taiwan's civil aviation market, Nieh said the major shareholder of EVA Airways and its unit UNI Airways Corp (立榮航空), Evergreen Group (長榮集團), also founder of the airline, would not sell its shares nor surrender management to foreign investors.

The policy may also have little impact on China Airlines and its subsidiary Mandarin Airlines Co (華信航空) unless the government-controled carrier implements the long-delayed privatization plan.

The government controls the carrier through China Aviation Development Foundation (航發會) under the Ministry of Transportation and Communications, which owns nearly 70 percent of China Airlines.

The ministry had earlier planned share offerings to privatize China Airlines and introduce foreign strategic partners to improve the operation of the carrier in 2004, but later halted the plan as the government wanted the carrier to execute government missions.

"Whether to continue the privatization depends on government policy ... No foreign investors contacted us [about share purchases] at this point," China Airlines chairman Philip Wei (魏幸雄) said.

Singapore Airlines had planned to buy shares of China Airlines several years ago, but did not clinch the deal.

Toh Giam Ming (卓嚴民), general manager of Singapore Airlines' Taiwan branch office, refused to comment whether his company would have renewed interest in China Airlines if the carrier offloaded its shares to foreign investors, but said "we are open to any opportunities."