Wed, Mar 06, 2013 - Page 4 News List

Government ‘evaluating low-cost carrier terminal’

By Shelley Shan  /  Staff reporter

The government is still evaluating whether to build a new terminal for low-cost carriers at Taiwan Taoyuan International Airport, Minister of Transportation and Communications Yeh Kuang-shih (葉匡時) said yesterday

Twelve low-cost carriers have begun offering flights from Taiwan since 2004, of which 10 operate out of Taiwan Taoyuan International Airport and two others from Taipei International Airport (Songshan airport).

Last year, Taoyuan International Airport Corp (TIAC) said it proposed having a separate terminal for budget airlines in the nation’s largest international airport, because of increasing complaints from passengers boarding non-budget flights.

As low-cost carriers generally operate on a strict budget and have a limited number of check-in counters, the long lines formed by passengers of low-cost carriers often disrupt the operations of other carriers, TIAC said.

To accommodate the discount airlines, the company planned to remodel the building previously used by the Grand Hotel’s flight catering service at Taoyuan.

Yeh said that turning the old building into a terminal for low-cost carriers was “just a thought,” adding that he has asked the Civil Aeronautics Administration (CAA) to evaluate whether it is necessary to build a new terminal and whether budget carriers should pay different aircraft landing charges.

“Support from the government is the main reason why the low-cost carriers can survive,” Yeh said. “Malaysia is lauded for its success in developing budget carriers, yet that success also means that it can only attract certain types of visitors, which may not be a good sign for the airport and tourism in the long run.”

However, Yeh said the government was considering lowering the amount of capital needed to operate budget or other airline services in Taiwan from NT$10 billion (US$337.2 million) to NT$5 billion to encourage more carriers to offer such flight services in Taiwan.

Yeh said that budget carriers are more competitive for a number of popular flights, including those to Japan, Shanghai and Beijing, but they do not necessarily have a competitive edge on every flight route.

Last week, the CAA also said that it had proposed lowering the aircraft landing charges at the Hualien, Chiayi and Tainan airports as an incentive to encourage more low-cost carriers to offer services there.

Meanwhile, Yeh said the ministry had yet to approve a CAA proposal to raise fares on domestic flights, adding that no domestic flight services would be canceled or curtailed before any decision is made.

The CAA proposed raising domestic flight ticket prices after taking into account oil prices, which have risen from NT$13.6 per liter in 2004 to NT$28 per liter last month.

Many domestic carriers have suffered financial losses because of the increase in oil prices.

Yeh said the ministry would need to consider other factors when reviewing the CAA’s proposals.

“People often complain that it is difficult to get a ticket to the nation’s outlying islands,” Yeh said. “Domestic carriers, whose financial losses could top NT$300 million a year, tend to merge flights or find ways to cancel services to limit losses. With the accumulated losses, they are unlikely to buy new aircraft or add flights.”

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