TransAsia Airways Corp (復興航空) will distribute severance pay to its employees and guarantee its passengers’ rights through a NT$1.2 billion (US$37.56 million) mutual trust fund after the company’s dissolution, chief executive officer Liu Tung-ming (劉東明) said yesterday.
Liu announced the dissolution at a news conference earlier yesterday.
The company on Monday announced without prior notice that it had suspended all flights, affecting thousands of passengers.
The decision to quit the aviation business was reached at an extraordinary meeting of the airline’s board yesterday morning and will be referred to a shareholders’ meeting for discussion before coming into effect, Liu added.
He said that despite having taken various measures to improve the carrier’s finances, it had continued to suffer losses in the wake of two deadly crashes in July 2014 and February last year that tarnished the airline’s image and sent its passenger load factor below 70 percent.
Company employees face layoffs after the announcement of the firm’s dissolution.
As of the end of last month, the airline had 1,795 employees registered in the National Labor Insurance program, according to the Ministry of Labor.
However, according to regulations, employers are required to file an application with labor affairs authorities at least 60 days before carrying out any mass layoff.
Chen said that from the mutual trust fund, NT$600 million would be used for employee severance payments and the other NT$600 million would be used to compensate passengers.
The Taiwan Stock Exchange on Monday suspended the trading of the company’s shares at the request of the carrier. The suspension is to remain in place until the company applies for trading to resume.
The stock is to be delisted after the company is dissolved.
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