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FAT needs at least NT$18 million in short term: CAA

The Civil Aeronautics Adminis-tration (CAA) confirmed yesterday that Far Eastern Air Transport Corp (FAT, 遠東航空) must raise at least NT$18 million (US$582,000) to continue operating through Monday.

CAA deputy director-general Wang Te-ho (王德和) said that the company had paid for operational expenses through tomorrow, which will leave it with NT$4 million in cash.

The company has yet to pay for expenses on Saturday and Sunday, he said.

FAT estimates it would need at least NT$6 million in cash to maintain its daily operations, with fuel charges accounting for the majority at NT$5 million, Wang said.

The company had a debt-to-asset ratio of 87.43 percent and current ratio (a measure of a company's ability to pay off short-term liabilities with liquid assets) of 55.52 percent last month, FAT said in a statement on Feb. 14.

Shares of FAT were restricted to cash-only trading, beginning on Feb. 14, after the company bounced NT$150 million in checks to CPC Corp, Taiwan (台灣中油), the over-the-counter GRETAI Securities Market said in a notice on Feb. 13.

Wang also said yesterday that the Taipei District Court had issued an emergency order to freeze any sale of FAT's assets.

The district court approved the airline's request for court protection from creditors last Friday.

FAT claims it will receive a huge sum by March 5 to cover its employees' paychecks and year-end bonus, but the court order would make it difficult for the airline to get the money, Wang said.

"Those who owe FAT might now refuse to pay at all because of the emergency order," Wang said.

"They might use the court order to their advantage," he added.

The company said on Monday that it planned to ask the court to reverse its ruling.

FAT's flights continued to operate normally yesterday, although the company did cancel some daily flights -- between Taipei and Kaohsiung -- that had low passenger loading, Wang said.
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