Thu, May 18, 2017 - Page 12 News List

Airlines say proposed amendment was designed to help former EVA executive

By Shelley Shan  /  Staff reporter

Airlines said that a proposed amendment to the Regulations of Civil Air Transport Enterprise (民用航空運輸業管理規則) by the Civil Aeronautics Administration (CAA) that would allow individuals to launch airline companies was designed to help former EVA Airways Corp (長榮航空) chairman Chang Kuo-wei (張國煒).

Current regulations only allow companies to apply for scheduled or nonscheduled services on international routes if they have been operating internationally for more than five years, and have had sound financial results and have demonstrated good operating practices.

They must also post annual revenue of at least NT$6 billion (US$199.1 million) in the three years leading up to an application.

The amendment was proposed after lawmakers passed a resolution that asked the CAA to consider revising Article 3 of the regulations.

Lawmakers said that the CAA should convene meetings to discuss the issue.

The resolution implied that there is a lack of competition.

The agency should re-examine the rules about capital required to apply to be a carrier and allow individuals with solid management experience in the airline industry to set up companies, lawmakers said, adding that the changes would raise industry standards and enhance aviation safety.

The resolution was passed after Chang last year announced intentions to return to the airline industry by establishing his own carrier.

Although the proposal would allow individuals to found new airlines, it would also raise the minimum capital required to operate international flights from NT$2 billion to NT$6 billion.

However, two airlines have collapsed in the past six months, while another struggles with an aging fleet of aircraft, so it is not a good time for new entrants, carriers said, adding that greater competition and rising fuel prices are also hampering operations.

China Airlines Ltd (中華航空) and EVA Airways reported slumps in performance in the first quarter.

Another airline said that the amendment is clearly designed for Chang, as he is the only candidate who is capable of meeting the NT$6 billion funding requirement.

Industry observers said that operating an airline requires a team and that the task would prove daunting for an individual.

Still, some industry insiders were open to the change, saying that the nation should allow those who are capable and have the passion to try their hand at aviation, which would provide more options for consumers.

Former EVA Airways spokesperson Nieh Kuo-wei (聶國維) said that the amendment was not tailor-made for Chang, but was for any person who might seek to fulfill their aspirations in the airline industry.

The CAA said that it is to hold more meetings on the proposal and report its findings to the legislature.

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