China Airlines Ltd (中華航空) is to take over the routes operated by TransAsia Airways Corp (復興航空) next month to fly passengers already booked with the stricken company, the Executive Yuan said yesterday.
Starting on Thursday next week, China Airlines is to take over all the international and domestic routes operated by TransAsia except for a route connecting Kinmen County and Penghu County, Executive Yuan spokesman Hsu Kuo-yung (徐國勇) said.
The decision was made at an inter-ministerial meeting, as the unexpected closure of TransAsia has affected Taiwanese passengers, especially those in the east and on outlying islands, Hsu said.
The route transfer is authorized by the Civil Aviation Act (民用航空法), which stipulates that commercial airlines are obliged to increase the number of flights or operate different routes at the government’s request in an emergency.
China Airlines should have the capacity to take on TransAsia’s flights as it is the off-season, but it does not have the smaller planes required to operate flights between Kinmen and Penghu, he said.
Meanwhile, the Ministry of Justice has frozen a NT$1.2 billion (US$37.64 million) trust fund belonging to TransAsia, NT$600 million of which is to be used to cover severance pay for the airline’s employees and the remaining NT$600 million to refund customers and travel agencies.
The Ministry of Labor estimated that TransAsia would have to pay NT$640 million to its employees, which should be covered by the frozen trust fund and the company’s remaining assets after it is liquidated, Hsu said.
“Administrative measures have been taken to ensure that [TransAsia chairman] Vincent Lin (林明昇) does not leave the country,” Hsu said in response to the rumor of an imposition of a travel ban on Lin, without specifying what the measures are.
Prosecutors are to independently decide whether to freeze the personal assets of TransAsia executives, including Lin, and the Executive Yuan has informed prosecutors of the potential involvement of company executives in alleged insider trading.
Premier Lin Chuan (林全) said the Cabinet had been looking into a possible takeover of the company after TransAsia on Tuesday announced that it would be dissolved and all of its employees laid off, but there is no legal provision for the government to take over an aviation company.
The Banking Act (銀行法) stipulates conditions under which the government can take over a financial institution, but there is no such provision in the Civil Aviation Act (民用航空法), a “legal blind spot” that prevents the government from stepping in, he said.
Vice Premier Lin Hsi-yao (林錫耀) and Executive Yuan Secretary-General Chen Mei-ling (陳美伶) had been asked to assess the possibility of a takeover or another option, the premier said.
“Ideally, we hoped to resume the operations of the fleet, crew and employees of TransAsia and minimize the impact [of the company closure],” Lin Chuan said.
“We did not know in advance about the situation until the company on Monday unexpectedly announced the suspension of its operations,” Lin Chuan said.
A meeting between the TransAsia management team and employees to address the abrupt disbanding of the airline broke down yesterday in just 30 minutes.
Following the meeting, union adviser Lin Chia-wei (林佳瑋) criticized the TransAsia management team for a “complete lack of sincerity.”