East Star Airlines Co (東星航空), a cash-strapped private regional carrier, has become the first Chinese airline to go bankrupt, state media reported yesterday.
The company’s debt totalled more than 1 billion yuan (US$145 million) at the end of last year, against assets of just 629.6 million yuan, the People’s Daily said.
The Intermediate People’s Court in Wuhan, where East Star is based, announced the bankruptcy in a statement on Thursday, the newspaper said.
The court also rejected a restructuring plan submitted by the carrier’s parent East Star Group (東星集團) and investment firm ChinaEquity (信中利投資), which had promised to inject between 200 million yuan and 300 million yuan into East Star, Xinhua news agency said on Thursday.
The court said the plan “was infeasible and failed to meet the conditions for a legal restructuring,” arguing that ChinaEquity had failed to explain where it would get the money from, the agency said.
East Star, which operated more than 20 regional routes early last year, was hit by cash flow problems in the second half of last year as travel demand slumped amid the economic crisis.
It was ordered to stop flights by the nation’s aviation regulators in March this year because of a failure to pay plane rental fees, after it rebuffed a takeover offer from flag carrier Air China (中國國際航空).
The country’s small number of private airlines have been especially vulnerable to the economic downturn as their passenger base is relatively small and they do not have the same access to funding as state-owned competitors.
IN THE AIR: While most companies said they were committed to North American operations, some added that production and costs would depend on the outcome of a US trade probe Leading local contract electronics makers Wistron Corp (緯創), Quanta Computer Inc (廣達), Inventec Corp (英業達) and Compal Electronics Inc (仁寶) are to maintain their North American expansion plans, despite Washington’s 20 percent tariff on Taiwanese goods. Wistron said it has long maintained a presence in the US, while distributing production across Taiwan, North America, Southeast Asia and Europe. The company is in talks with customers to align capacity with their site preferences, a company official told the Taipei Times by telephone on Friday. The company is still in talks with clients over who would bear the tariff costs, with the outcome pending further
A proposed 100 percent tariff on chip imports announced by US President Donald Trump could shift more of Taiwan’s semiconductor production overseas, a Taiwan Institute of Economic Research (TIER) researcher said yesterday. Trump’s tariff policy will accelerate the global semiconductor industry’s pace to establish roots in the US, leading to higher supply chain costs and ultimately raising prices of consumer electronics and creating uncertainty for future market demand, Arisa Liu (劉佩真) at the institute’s Taiwan Industry Economics Database said in a telephone interview. Trump’s move signals his intention to "restore the glory of the US semiconductor industry," Liu noted, saying that
NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong
STILL UNCLEAR: Several aspects of the policy still need to be clarified, such as whether the exemptions would expand to related products, PwC Taiwan warned The TAIEX surged yesterday, led by gains in Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), after US President Donald Trump announced a sweeping 100 percent tariff on imported semiconductors — while exempting companies operating or building plants in the US, which includes TSMC. The benchmark index jumped 556.41 points, or 2.37 percent, to close at 24,003.77, breaching the 24,000-point level and hitting its highest close this year, Taiwan Stock Exchange (TWSE) data showed. TSMC rose NT$55, or 4.89 percent, to close at a record NT$1,180, as the company is already investing heavily in a multibillion-dollar plant in Arizona that led investors to assume
RSS