Wed, Aug 02, 2006 - Page 2 News List

Airports fail to attract investors

DOMESTIC FLIGHTS The aeronautics administration said no private investors had expressed interest in operating domestic airports, amid a report on losses at the facilities

By Shelley Shan  /  STAFF REPORTER

The Civil Aeronautics Administra-tion (CAA) confirmed yesterday that so far no private investors had shown any interest in running the nation's domestic airports.

The administration made the comments in the wake of a story published by the Chinese-language daily the China Times yesterday which said that except for CKS International Airport and the airports in Taipei and Kaohsiung, 15 domestic airports had suffered an aggregate loss of NT$900 million (US$28.13 million).

The administration announced roughly a year ago that it had opened domestic airports for private investment.

The airports have not been profitable for years.

The report cited an analysis report published by the Ministry of Transportation and Communications (MOTC) that showed that the average number of flights arriving or departing from airports in Pingtung and Penghu Counties was below 10 per day.

Lee Chung-roung (李仲榮), vice director of the administration, told the Taipei Times yesterday that the agency was evaluating several airports that were seen as being most likely to draw the attention of investors.

The airport in Kinmen could be one of them, he said, adding that a substantial number of people passed through the area.

A statement from the administration said that the increased convenience of road transportation and soaring fuel surcharges explained the declining number of passengers on domestic flights.

The statement also warned of the potential impact on the domestic airline industry.

Lee said that the airports in Penghu and other islands around Taiwan were in place to take care of the transportation needs of the residents in these areas.

The government, he said, was obligated to compensate for operational losses in maintaining facilities at these airports.

Lin Chih-ming (林志明), director of the Department of Aviation and Navigation, said the situation highlighted the competition between different transportation systems.

Domestic airline services had been replaced by increased bus operators on national highways, Lin said.

Lin added that the ministry was considering ways to both encourage domestic airlines to continue offering services and attract private investors to take over the airports, including free landing fees or free monthly rent.

Meanwhile, CAA Director Billy Chang (張國政) said that the MOTC was encouraging mergers among domestic airlines to deal with shrinking demand for domestic flights.

Lin said the airlines would naturally have their own considerations, particularly as they are eying a bigger market once the government lifts the ban on direct cross-strait flights.

He said the ministry was offering two incentives: airlines that merge would be placed on a priority list for more profitable routes and only have to pay half the landing charges.

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