Employees of the financially troubled Far Eastern Air Transport (FAT, 遠東航空) urged the government yesterday to bail out the airline after FAT’s management team announced the suspension of its operations on Monday.
FAT executives yesterday set up an emergency team to take charge of the company’s businesses and urged the government to get involved in the company’s management.
“FAT executives truly believe that the airline still offers operating value. However, as FAT’s board of directors were unable to attract capital injection, the situation can only be resolved if the government gets actively involved,” Hanson Chang (張有朋), senior manager of FAT’s public relations office, said yesterday.
Chang said FAT planned to suspend domestic flights but operate chartered overseas flights, which will be paid by local travel agencies.
“Domestic air routes will be discontinued in the short term,” Chang said.
International routes — including Palau, Bali in Indonesia, Japan, and Laoag in the Philippines — will continue to operate, he said.
Chang said FAT had approximately NT$3.4 million in cash as of yesterday, and expected the amount to increase to NT$12 million (US$388,900) within the next two days after receiving other income, Chang said, without specifying its income sources.
Chang said FAT also planned to sell shares of ezfly.com (易飛網), an online travel agency backed by the company and which it estimated to have a book value of NT$90 million, in a bid to increase FAT’s revenues.
FAT’s current net value is close to zero and needs a short-term capital injection of NT$2 billion to help the company maintain its operations, Chang said.
“FAT’s main problem is the air route to Jeju, South Korea, with up to 300 Taiwanese tourists stuck there,” Chang said.
If the company were to add in flight extensions to Beijing, Shanghai and Shenyang, the total number would be around 1,000, Chang said.
“As the number of tourists stuck in Jeju is huge and FAT has to pay for the fuel costs itself, FAT will have to negotiate with the Civil Aeronautics Administration (CAA) [to resolve this issue],” Chang said.
FAT canceled all of its domestic routes yesterday, but dispatched four international flights — Taipei-Jeju, Taipei-Palau, Kaohsiung-Jeju and Kaohsiung-Laoag — to bring some of the Taiwanese tourists home.
The Travel Agents Association (旅行公會全國聯合會) calculated that, as of yesterday, a total of 1,438 FAT passengers were not able to return because of flight cancelations.
Association chairman Yao Ta-kuang (姚大光) said yesterday that it would sue FAT and seek compensation from the CAA for failing to supervise FAT’s operations.
“They knew there was something wrong with the company, but they let it continue until it fell,” he said.
Yao added that the legal action would be collectively taken by about six travel agencies in a day or two.
But Yao declined to answer when asked why the travel agencies continued to sell FAT ticket if they knew it had financial problems.
ADDITIONAL REPORTING BY SHELLEY SHAN