Fri, Jan 24, 2014 - Page 3 News List

Airline body reduces FAT flights due to fund failure

GROUNDED:The CAA imposed the penalty after the airline failed to meet a funding threshold it agreed to in a deal that allowed it to resume operations after a debt crisis

By Shelley Shan  /  Staff reporter

The Civil Aeronautics Administration (CAA) yesterday said that it would further reduce the number of international charter flights dispatched by Far Eastern Air Transport (FAT) because of the company’s failure to obtain the amount of funds needed to sustain its operations.

The reduction is to be implemented in March and will see the number of international charter flights that the carrier can dispatch slashed to eight per month, the administration said.

Keeping sufficient operational funds is one of the conditions that the airline agreed to in the deal it signed with the CAA when the aviation authority allowed the company to resume operating two years ago after it underwent a debt crisis.

According to the administration, the airline was supposed to maintain operational funds of NT$150 million (US$4.96 million) a month, adding that it would be fined each time it failed to meet that requirement.

The administration’s records show that FAT has been fined six times since January last year, with the accumulated fines exceeding NT$12 million.

“The airline has received the maximum penalty stipulated in the Civil Aviation Act (民航法). Given the series of safety incidents on the carriers’ flights last year and its repeated failure to have sufficient operational funds, we have suggested to the Ministry of Transportation and Communications that FAT’s international charter flight services be restricted,” said Chen Jau-yuh (陳昭諭), director of the CAA’s air transport division.

Chen said that since the airline has already sold the tickets for charter flights departing this month or next month, the administration decided to implement the penalty in March to minimize the impact on consumers.

The restriction would be lifted gradually if the company improves its financial situation, she added.

In response, FAT said it has asked travel agencies to suspend the sale of tickets for its flights in March, adding that it will seek to appeal this decision with the aviation authority.

The airline said it has enough money to meet the operational fund threshold, but it feared that its creditors may petition the courts to use the funds collateral for the company’s debts.

Currently, FAT provides charter flight services to Northeast and Southeast Asian countries.

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