Minister of Transportation and Communications Yeh Kuang-shih (葉匡時) yesterday said the ministry would seek to finalize the pricing scheme for domestic flights before the end of the year.
Yeh was briefing lawmakers at the legislature’s Transportation Committee on the operations of the Taiwan Railways Administration.
Chinese Nationalist Party (KMT) Legislator Lin Ming-cheng (林明溱) and Democratic Progressive Party Legislator Tsai Chi-chang (蔡其昌) asked if the ministry would raise fares for domestic flights, particularly after EVA Airways threatened to withdraw from the domestic market if the government refuses to permit the carrier to raise its prices.
Yeh said the Civil Aeronautics Administration (CAA) has yet to submit its proposal on domestic prices to his ministry for final approval, adding that he asked the CAA to continue talks with domestic carriers.
Oil prices have doubled in the past nine years, but ticket prices for domestic flights have remained unchanged, he said.
“In the past, we gave carriers exclusive rights to operate a few profitable cross-strait flights to compensate their losses on domestic flights, as a way to keep them offering the flights,” Yeh said. “However, profits shrank due to the continued increase in oil prices and simultaneous rise in cross-strait flights, putting the carriers under tremendous pressure [over unprofitable routes].”
The two lawmakers urged the ministry to take into account the affordability of domestic flights as well as ways to keep the carriers financially sustainable.
As per an earlier request from the legislature, Yeh said the ministry would hold a public hearing on the pricing scheme for domestic services next month before making an announcement on when and how domestic ticket prices would be adjusted.
Yeh said that only tickets that are valid for one year are available for sale on the domestic market, which is very inflexible.
He said the new pricing scheme would ensure that various types of tickets are available for consumers and there would be greater price differences between flights operating at peak hours and those at off-peak hours.
The government would continue to subsidize flight services to outlying islands and remote areas as they are part of the public transport system, he said.