Tue, May 13, 2008 - Page 12 News List

FAT temporarily halts operations

BLOOMBERG AND CNA

Far Eastern Air Transport Corp (FAT, 遠東航空) said it would suspend its operations temporarily from tomorrow because of a lack of funds.

The Taipei-based carrier apologized to the public for any inconvenience resulting from its decision, it said in a filing to the Taiwan Stock Exchange yesterday.

Far Eastern Air operates domestic flights and regular flights between Taiwan and resort islands including Jeju of South Korea, Palau, and Bali of Indonesia.

The carrier said in February it was seeking protection from creditors because of “financial difficulties.”

Meanwhile, nine travel service companies accused Alex Lou (樓文豪), a managing director of Cambodia-based Angkor Airways Corp (吳哥航空), of fraud at the Taipei District Prosecutors Office yesterday after sustaining heavy financial losses caused by the airline’s abrupt suspension of flights.

Yao Ta-kuang (姚大光), chairman of the Travel Agent Association of the Republic of China Taiwan, said the companies — all of which are Taipei-based — made the move after seeking assistance from the Executive Yuan’s Consumer Protection Commission.

Yao said commission officials said that the travel agents should take legal action as this would be the most efficient way for the travel agencies to get back money they have paid for advance bookings on flights offered by the Phnom Penh-based airline between Taipei and Siem Reap — home to the world famous Angkor Wat complex.

The travel agencies sustained losses valued at more than NT$100 million (US$3.2 million) due to the suspension of the flights, Yao said.

Lou was detained by prosecutors in Taipei on May 1 in relation to an alleged embezzlement scandal involving FAT, which leased planes to Angkor Airways.

Lou was responsible for the financial management of Angkor Airlines’ Taipei branch and without him, the branch faced insurmountable cash flow problems, Angkor officials said.

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