The government will lend NT$4.5 billion (US$130 million) and NT$4 billion (US$115 million) to China Airlines Co (CAL, 華航) and EVA Airlines Corp (長榮航空), the nation's two international air carriers, pundits said yesterday.
Yesterday's decision, in a closed-door inter-ministerial meeting, was held to help airlines weather the SARS triggered fall-off in revenue and passenger traffic.
PHOTO: AFP
"The government has agreed to offer credit-guaranteed loans of NT$4.5 billion and NT$4 billion, respectively, for a period of up to two-and-one-half-years, an industry source, who requested anonymity, told the Taipei Times.
Before the meeting, Chinese-language media reported that the two airlines had sought government help in securing up to NT$9 billion in preferential loans to survive the crisis. Taiwan's four smaller airlines are also looking for cash with Uni Airways Corp (立榮航空) requesting some NT$800 million.
The bailout plan for all six airlines may cost the government some NT$10 billion in credit-guaranteed loans, the media reported.
Council for Economic Planning and Development Vice Chairwoman Ho Mei-yueh (
Both international airlines also refused to confirm the news, but did say they are in dire straits.
"The situation is worsening," EVA spokesman Nieh Kuo-wei (聶國雄) said, "the company's occupancy rate on Asian routes has dropped to between 30 percent to 40 percent, and US and European routes barely remains at 50 percent."
Most airlines need 70 percent occupancy to break even.
Last week, CAL and EVA both reported a drastic drop in last month's sales with CAL seeing a 23.8 percent drop in revenues from a year earlier. EVA saw a 9.34 percent drop in last month's revenues from a year earlier, but has since suffered a 35.86 percent drop in passenger travel in the same period before it was granted the lucrative Hong Kong to Taipei route.
Both carriers are still financially viable but have lost over NT$100 million each in just one month and may see performance worsen in the second quarter, an industry analyst said yesterday, requesting he not be named.
Of greater concern is whether weak domestic air carriers will survive the financial turbulance or declare bankruptcy if the government fails to lend a hand, the analyst added. Media has speculated Far Eastern Air Transport Co (遠東航空) may be the first to go under.
Far Eastern has recently begun to launch merger-and-acquisition talks with China Airlines and Trans-Asia Airways (復興航空) with plans to cut 10 percent of its payroll by eliminating about 120 jobs soon.
To weather the crisis, the analyst yesterday advised financially troubled carriers to seriously consider consolidation through mergers and lay-offs.
"A merger plan will help bring in capital while lay-offs will help cut back costs," he said.
China Airlines, in addition, recently proposed an early retirement plan, providing employees with three to six months pay and encouraging employees to take unpaid leave.
"The plan aims to cut back unnecessary staff but will be conducted on a voluntary basis," CAL spokesman Roger Han (韓梁中) said.
Anna Bhobho, a 31-year-old housewife from rural Zimbabwe, was once a silent observer in her home, excluded from financial and family decisionmaking in the deeply patriarchal society. Today, she is a driver of change in her village, thanks to an electric tricycle she owns. In many parts of rural sub-Saharan Africa, women have long been excluded from mainstream economic activities such as operating public transportation. However, three-wheelers powered by green energy are reversing that trend, offering financial opportunities and a newfound sense of importance. “My husband now looks up to me to take care of a large chunk of expenses,
SECTOR LEADER: TSMC can increase capacity by as much as 20 percent or more in the advanced node part of the foundry market by 2030, an analyst said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to lead its peers in the advanced 2-nanometer process technology, despite competition from Samsung Electronics Co and Intel Corp, TrendForce Corp analyst Joanne Chiao (喬安) said. TSMC’s sophisticated products and its large production scale are expected to allow the company to continue dominating the global 2-nanometer process market this year, Chiao said. The world’s largest contract chipmaker is scheduled to begin mass production of chips made on the 2-nanometer process in its Hsinchu fab in the second half of this year. It would also hold a ceremony on Monday next week to
State-run CPC Corp, Taiwan (CPC, 台灣中油) yesterday signed a letter of intent with Alaska Gasline Development Corp (AGDC), expressing an interest to buy liquefied natural gas (LNG) and invest in the latter’s Alaska LNG project, the Ministry of Economic Affairs said in a statement. Under the agreement, CPC is to participate in the project’s upstream gas investment to secure stable energy resources for Taiwan, the ministry said. The Alaska LNG project is jointly promoted by AGDC and major developer Glenfarne Group LLC, as Alaska plans to export up to 20 million tonnes of LNG annually from 2031. It involves constructing an 1,290km
TECH CLUSTER: The US company’s new office is in the Shalun Smart Green Energy Science City, a new AI industry base and cybersecurity hub in southern Taiwan US chip designer Advanced Micro Devices Inc (AMD) yesterday launched an office in Tainan’s Gueiren District (歸仁), marking a significant milestone in the development of southern Taiwan’s artificial intelligence (AI) industry, the Tainan City Government said in a statement. AMD Taiwan general manager Vincent Chern (陳民皓) presided over the opening ceremony for the company’s new office at the Shalun Smart Green Energy Science City (沙崙智慧綠能科學城), a new AI industry base and cybersecurity hub in southern Taiwan. Facilities in the new office include an information processing center, and a research and development (R&D) center, the Tainan Economic Development Bureau said. The Ministry
RSS