Four domestic airlines are considering the introduction of no-frills domestic flights to buffer the impact of the high-speed railway on their revenues, industry officials said yesterday.
"Forming an alliance among four local carriers for joint operations is one of the viable plans," said Michael Lo (樂大信), chairman of the Taipei Airlines Association (台北市航空運輸公會).
Lo responded to a Chinese-language media report which quoted Chen Hsiung-chih (陳雄智), vice president with UNI Airways Corp (立榮), as saying that four local carriers had reached consensus on a joint response to the high-speed railway, which is scheduled to go into operation in October next year.
The four local airlines that run domestic flights -- UNI Airways, TransAsia Airways (復興), Mandarin Airlines (華信) and Far East Air Transport Corp (遠東) -- have suffered a serious decline in passenger figures over the past few years. The high-speed railway will cut travel time between Taipei and Kaohsiung from around six hours to one-and-a-half hour, and will be 20 percent to 30 percent less expensive than current air fares, which is expected to further eat away at airlines' profits.
The possible partnership could extend to other transportation industries, such as bus or taxi companies, said Lo, who also serves as president of Mandarin Airlines.
The move may attract passengers by facilitating transport to and from airports, which will also shorten customers' transit time, he added.
Janet So (湛華生), public relations manager at TransAsia Airways, confirmed that the carriers have consensus on this issue, and that the service would focus on the busy Taipei-Kaohsiung route.
As the consolidation involves complex issues, including personnel, finance, corporate culture and fleet composition, Lo said a final agreement will not be signed before the end of the year.
He said the four airlines created a task force last week to formulate potential solutions for the industry.
Besides needing permission from the Civil Aeronautics Administration, the proposed joint operation needs the approval of the Cabinet's Fair Trade Commission, Lo said.
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