TransAsia Airways Corp (復興航空) yesterday said it is to dissolve the company after its attempts to keep it afloat failed.
The company looked at options, including a sale, restructuring and capital injections, during three meetings between its board of directors and industry experts, TransAsia Airways chief executive officer Liu Tung-ming (劉東明) told a news conference at the Taiwan Stock Exchange.
“Despite our best efforts to devise a new business model, the company could not produce an effective turnaround plan to repair its deteriorating finances,” Liu said.
Photo: CNA
The airline said it is unable to repay US$75 million in European convertible bonds due on Tuesday next week.
The company’s net worth was estimated at about NT$5.44 billion (US$170.29 million), or a book value of NT$7.17 per share, as of the end of last month, TransAsia vice president Chen I-chieh (陳逸潔) said.
The airline operated 27 routes in Taiwan, China and the rest of Asia, each representing about a third of total sales, Chen said.
Photo: Lee Chung-hsien, Taipei Times
In the first three quarters, the company racked up losses of NT$2.2 billion, Liu said.
TransAsia chairman Vincent Lin (林明昇) blamed the declining number of Chinese visitors, as well as rising fuel prices and a strengthening US dollar, for the company’s steep losses.
TransAsia’s load factor had fallen to about 60 percent, which was well below its domestic peers’ and unsustainable, Lin said.
TransAsia shares are to resume trading today following yesterday’s suspension, but trading would be conducted on a full-cash delivery basis, the Financial Supervisory Commission (FSC) said.
At a news conference held jointly with the heads of government agencies yesterday, the Cabinet said that the impact of the airline’s closure would be limited and the company has enough cash to refund customers and cover severance pay.
An estimated 100,000 travelers are affected by the unexpected folding of the nation’s first commercial airline, but other carriers have capacity to take on passengers booked to fly with TransAsia as it is the off-season, Civil Aeronautics Administration (CAA) Air Transport Division director Han Chen-hua (韓振華) said.
TransAsia has created a trust fund to ensure that customers get a full refund on booked flights, and the company will not dismiss ticketing and customer service staff until Dec. 20, so that they can assist in the transfer of passengers to other airlines, the firm said.
The CAA formed a special task force immediately after TransAsia announced a temporary suspension of operations on Monday to ensure that travelers’ rights are protected, Fan said.
The CAA is to impose a fine of between NT$600,000 and NT$3 million on TransAsia for halting flights without seeking prior approval.
The CAA has conducted regular financial inspections on TransAsia, and the company still holds more than NT$1 billion in cash and is not facing an immediate financial crisis, Han said.
TransAsia has 1,735 employees and they are covered by labor insurance, while there is NT$310 million in the company’s pension fund account, Deputy Minister of Labor Kuo Kuo-wen (郭國文) said.
“The money is more than enough to pay employees’ pensions and the remaining amount can be used to cover severance pay,” Kuo said.
The FSC and prosecutors have launched an inspection into possible insider trading in the company’s shares, and it has yet to be determined whether company executives were involved, commission vice chairman Huang Tien-mu (黃天牧) said.
The Taiwan Stock Exchange on Aug. 15 listed TransAsia as financially unstable, to warn investors of the risk involved in trading the company’s shares, Huang said.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source