TransAsia Airways Corp (復興航空) shares yesterday shed the daily maximum in Taipei trading — with further short-term effects on company business and stock price expected — after one of its aircraft crashed into the Keelung River in the capital earlier in the day.
TransAsia shares stayed flat in the early session, but lost value later, as news of the late morning crash of TransAsia Airways Flight GE235 affected investors’ confidence.
It was the second fatal incident involving the carrier in less than eight months, and is expected to harm its business and stock price more than the crash on Penghu on Aug. 23 last year, analysts said.
“Through the media’s reporting and the videos and photographs taken by eyewitnesses, the harm to TransAsia’s operations and reputation will be expanded,” a Capital Securities Corp (群益金鼎證券) official who refused to be named told reporters during a lunch gathering.
TransAsia chief executive Peter Chen (陳欣德), who led company officials in apologizing to the families of the passengers and the public yesterday afternoon, said the accident would not result in significant effects on the company, citing liability insurance to help cover losses and expected compensation to families.
Even though most compensation is set to be covered by aviation insurance, an expected rise in insurance fees over the next few years might increase the carrier’s costs, with its peers expected to pay higher insurance fees as well, analysts said.
The airline’s shares closed at NT$12.15 yesterday, the lowest level for more than two months, Taiwan Stock Exchange (TWSE) data showed.
Data offered by the Financial Supervisory Commission (FSC) showed that TransAsia, which focuses on regional passenger flights, has purchased full aviation insurance from eight local insurers, led by Cathay Century Insurance Co (國泰產險).
Cathay Century has established an emergency response team for the accident and launched procedures for addressing further claims.
Meanwhile, the French-made turboprop ATR 72-600 that crashed yesterday is of the same series as the aircraft in the Penghu incident last year, an ATR 72-500, raising the public’s concerns over the type.
Chen said the company would continue replacing its ATR 72-500 turboprops with ATR 72-600 aircraft.
TransAsia operates five ATR 72-600 aircraft, while aiming to raise the number to 10 by the end of this year, company records showed.
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