While the Lunar New Year holiday is traditionally a peak time for travel, domestic airlines struggled this year amid tough competition from the high speed railway and soaring fuel costs.
"All four domestic airlines suffered losses last year," said Hanson Chang (
Aside from FAT, the other three airlines that focus on domestic flights are TransAsia Airways (復興航空), Mandarin Airlines (華信航空) and Uni Airways (立榮航空).
PHOTO: TSAI CHIH-MING, TAIPEI TIMES
Deregulation is the key to domestic airline companies' survival, especially in this "gloomiest winter," TransAsia chairman Fan Chih-chiang (
"There is a myriad of regulations and restrictions that tie the hands of domestic airlines, which are already at a disadvantage compared to China Airlines Ltd (CAL,
FAT, the only listed company among the four, saw its losses expand to NT$3.91 per share in the first three quarters of last year, compared with a loss of NT$0.66 per share from a year ago.
TransAsia and Uni Air also reported net losses of NT$0.19 and NT$0.79 respectively in the first half of last year.
Seven months after the launch of the high-speed railway service in January last year, airline services on two routes were halted given heavy losses, and two more will be suspended next month.
Uni Air, a subsidiary of the Evergreen Group (長榮集團), will stop flying between Taipei and Kaohsiung, while FAT will halt its Taipei to Tainan service.
While some industry observers have suggested that mergers or joint operations could relieve the oversupply, Fan disagreed.
He said a merger would only work if the airlines' routes were complementary and they operate the same type of aircraft.
But since the four domestic airlines own eight different types of aircraft and compete on more or less the same routes, a merger would not be a solution as it would not cut maintenance costs nor expand the airlines' operations network, he said.
Those are the same reasons why the four can't operate joint services, said Irving Hsu (
Hsu said the Civil Aeronautics Administration's (CAA) demand that each route be serviced by two competing airlines also made a contingency plan difficult.
"Besides, even if one company drops out of a route, the other one would still struggle to make ends meet" because of the sharp decline in customers, Fan said.
Competing with CAL and EVA's near duopoly of international routes is difficult given government restrictions, although that did not stop the four from trying.
Anticipating the blow from the operation of the high-speed railway, FAT, Uni Air, Mandarin and TransAsia began to operate regular or charter flights to Vietnam, Cambodia, Thailand, Malaysia, the Philippines, Japan and South Korea.
However, these efforts have yet to drag them out of the red, as outbound flights contribute only a minor share to revenues.
Seeing strong demand for services that can help fliers save time and money, the four companies are exploring new transfer routes.
Chang said that although FAT's fast-growing service that transfers passengers through South Korea's Cheju Island to cities in the eastern and northern parts of China, including Shanghai, Beijing, Dalian and Shenyang, has helped to narrow losses, "nothing compares to direct flights when talking about a real boost in business."
Uni Air said even if direct flights could not be implemented in the short term, turning cross-strait charter flights into a regular service during weekends would significantly benefit all domestic airlines.
"We have waited too long. But if the restrictions are eased or lifted overnight, we can immediately meet the surging demand," Hsu said.
"Easing restrictions on the small three links (
Currently, only Kinmen residents or Taiwanese businesspeople in China are allowed take advantage of direct travel between Taiwan and Xiamen via Kinmen.
"We are desperate for spring after this long, cruel winter," Fan said.
"If we [four domestic airlines] had one unequivocal wish for this Lunar New Year, that would be a full-scale direct transportation link between Taiwan and China," Fan said.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last