On Saturday, president-elect Ma Ying-jeou (
The news, coupled with Ma's other election campaign promises to open up cross-strait transportation links, might have been expected to create a wave of euphoria in the nation's aviation industry, which has been hard hit by the launch of the high speed rail system last year.
The four domestic airlines -- Mandarin Airlines, Uni Airways, TransAsia Airways and Far Eastern Air Transport -- suffered huge losses last year, with Far Eastern Air on the brink of bankruptcy earlier this month. The companies have pinned their hopes on cross-strait deregulation to stay alive.
The direct charter flight policy would also be good news for international carriers China Airlines and EVA Airways.
But it will take more than direct flights to save some of these airlines. As the domestic carriers don't know how to improve operational efficiency and where to trim costs to stem their losses, their long-term prospects are contentious.
One of the myths about direct flights is that small Taiwanese airlines will be able to boost their bottomlines, while big carriers will see their revenues skyrocket.
The fear among many industry analysts, however, is that too many airlines plying the charter routes could undercut the ability of carriers to turn a profit. If everyone wants the same route, fewer seats will be filled on each plane, not more. It seems unlikely that these companies will be able to eliminate their old bad habits without aviation authorities intervening to allocate routes.
Moreover, the soaring cost of fuel, rising airport taxes in China and competition from other regional airlines will continue to pressure local carriers. To stay alive, they need to reduce operating costs and increase profitability.
The nation's aviation industry has long faced a problem of overcapacity in a market large enough for just two players. Industry consolidation is necessary. But it is unlikely the carriers will initiate any mergers or joint operations themselves, given the disparity of their fleets and corporate cultures and the incompatibility of their present routes.
Even though Mandarin Airlines merged with Formosa Airlines in 1999, the sector remains highly fragmented. Strong competition among all the players has kept talk of mergers at bay, while aviation authorities have not offered enough incentives to encourage consolidation. This issue now seems completely off the books; no one will want to concede anything with the golden goose of cross-strait flights so near.
The next administration must look beyond the allure of increased cross-strait travel and try to develop a sustainable plan for the aviation industry. To help revitalize this sector, the incoming government will have to improve the domestic business environment and airport infrastructure if Taiwan's aviation industry is to survive alongside its regional rivals.
As strategic tensions escalate across the vast Indo-Pacific region, Taiwan has emerged as more than a potential flashpoint. It is the fulcrum upon which the credibility of the evolving American-led strategy of integrated deterrence now rests. How the US and regional powers like Japan respond to Taiwan’s defense, and how credible the deterrent against Chinese aggression proves to be, will profoundly shape the Indo-Pacific security architecture for years to come. A successful defense of Taiwan through strengthened deterrence in the Indo-Pacific would enhance the credibility of the US-led alliance system and underpin America’s global preeminence, while a failure of integrated deterrence would
It is being said every second day: The ongoing recall campaign in Taiwan — where citizens are trying to collect enough signatures to trigger re-elections for a number of Chinese Nationalist Party (KMT) legislators — is orchestrated by the Democratic Progressive Party (DPP), or even President William Lai (賴清德) himself. The KMT makes the claim, and foreign media and analysts repeat it. However, they never show any proof — because there is not any. It is alarming how easily academics, journalists and experts toss around claims that amount to accusing a democratic government of conspiracy — without a shred of evidence. These
The Executive Yuan recently revised a page of its Web site on ethnic groups in Taiwan, replacing the term “Han” (漢族) with “the rest of the population.” The page, which was updated on March 24, describes the composition of Taiwan’s registered households as indigenous (2.5 percent), foreign origin (1.2 percent) and the rest of the population (96.2 percent). The change was picked up by a social media user and amplified by local media, sparking heated discussion over the weekend. The pan-blue and pro-China camp called it a politically motivated desinicization attempt to obscure the Han Chinese ethnicity of most Taiwanese.
On Wednesday last week, the Rossiyskaya Gazeta published an article by Chinese President Xi Jinping (習近平) asserting the People’s Republic of China’s (PRC) territorial claim over Taiwan effective 1945, predicated upon instruments such as the 1943 Cairo Declaration and the 1945 Potsdam Proclamation. The article further contended that this de jure and de facto status was subsequently reaffirmed by UN General Assembly Resolution 2758 of 1971. The Ministry of Foreign Affairs promptly issued a statement categorically repudiating these assertions. In addition to the reasons put forward by the ministry, I believe that China’s assertions are open to questions in international
RSS