Sun, May 11, 2008 - Page 2 News List

Travel industry scrambles to deal with halted flights

ANGKOR’S MOVEThe Cambodian airline company will not be able to repay Far Eastern Air Transport, from whom it rented its aircraft and cabin crew

By Shelley Shan  /  STAFF REPORTER

Following the unexpected shutdown of Angkor Airways Corp, two of the nation’s tourism associations have adopted different means to compensate customers.

In a statement on Friday afternoon, the Phnom Penh-based airline company said that starting yesterday, all flight services between Taipei and Angkor Wat would be canceled temporarily.

It also said that the detention of Alex Lou (樓文豪), head of Angkor Airways’ Taiwan branch, had caused the company tremendous difficulties in securing funds for its operations.

As such, Angkor Airways said it would not be able to reimburse Far Eastern Air Transport (FAT), from which it rents its aircraft and crew. The only option, therefore, was to suspend operations, it said.

Yesterday, 134 Taiwanese tourists returned to Taiwan on China Airlines, EVA Air and Vietnam Airlines. The remaining 315 tourists are expected to return tomorrow and on Tuesday. Chen Shu-juang (陳屬庄), a division chief at the Travel Quality Assurance Association, said customers who were unable to travel because of the canceled flights deserved a full refund.

“Given that Angkor Airways is financially unstable, travel agencies should have a way to manage the risk,” Chen said. “Customers should not have to lose their flight tickets.”

Secretary-general of the Travel Agent Association Hsu Kao-ching (�?y) said that Article 28 of the standardized travel contract stipulates that travel agencies are exempt from paying damages if the terms of the contract were breached as a result of force majeure — such as a natural catastrophe or war — or any cause for which the agencies are not responsible.

The article says that travel agencies should refund the customers after the indispensable costs were deducted, he said.

Hsu pointed said that some of the travel agencies had paid Angkor Airways in advance for charter flights until September. After the refunds to customers are added, the accumulated losses are expected to exceed NT$1 billion (US$32.6 million), he said.

Tai Der International Travel Co, one of the travel agencies affected, announced yesterday it would cease operations after settling the matter. Chiang Chi-duan (江志端), a division chief at the Tourism Bureau, said while travel agencies are required to purchase insurance before making travel contracts with customers, no insurance is required if an airline fails to perform its obligations.

“The travel agencies can only seek compensation through the legal system,” he said.

Representatives from the travel industry will hold talks tomorrow on ways to limit the damage to the sector.

Chiang said it would be a challenge for the government to file a lawsuit against Angkor Airways, as it would involve many complicated issues.

There are concerns that Angkor Airways’ decision could worsen debt-ridden FAT’s condition.

As of yesterday, Angkor Airways still owed FAT NT$790 million for aircrafts and on-board personnel. As a result of Angkor Airways’ decision to end operations, FAT also faces a NT$1 million shortfall in daily income.

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