The China Aviation Development Foundation (CADF) -- the biggest shareholder in China Airlines -- is scheduled to make public new board members today with marching orders to privatize the firm and dissolve itself as soon as practicable.
The appointments are to be completed by June 10.
The new board will be chaired by Minister of Transportation and Communications Lin Lin-san (林陵三). Minister without Portfolio Tsai Ching-yen (蔡清彥) made the announcement at the Cabinet yesterday.
Tsai was appointed by Premier Yu Shyi-kun on Wednesday to head a special task force to come up with a plan to reform the aviation foundation and China Airlines' management following the fatal crash of a China Airlines passenger jet off the Penghu Archipelago.
Tsai said that the job of the new board is to pursue the sale of all the foundation's stock by next year in order to reach the ultimate goal of fully privatizing the firm and eventually dissolving the foundation.
China Airlines is a joint venture between the private sector and the government-controlled CADF, which holds a 72 percent interest in the company.
Cabinet spokesman Chuang Suo-hang (
Tsai said that the Cabinet is grateful that Tsay and the rest of the board offered to resign to help push forward reforms of the foundation and China Airlines.
"Our goal is to see the foundation dissolved and removed from the airline's management and operations," Tsai said.
Tsay, a former minister of transportation and communications, had originally rebuffed a barrage of criticism against the airline, saying that the company is already private and that its management is appropriate.
Bowing to growing calls for his resignation, however, he, eight board directors and one supervisor tendered their resignations Thursday night.
Responding to the question of whether China Airlines could become a foreign company following privatization, Tsai said that such an eventuality was highly unlikely.
"The company's real problem lies in its lack of professional management and corporate practice," Tsai said. "We'd like to see the company managed jointly by a local firm with an international aviation management team."
In addition to the privatization plan, Tsai said that the airline must dedicate itself to improving its safety record.
The airline may establish a new maintenance company to replace its maintenance department, which may also be managed by an international group.
Before the airline is fully privatized, Tsai said, the foundation is not allowed to interfere in the airline's management.
Proceeds from the sale of the foundation's stock will go to an aviation fund set up by the Ministry of Transportation and Communications.
The ministry will oversee the sale of the stock and the proceeds generated from the sale.
After the foundation's dissolution, tasks such as the cultivation of aviation talent and the development of the industry will be transferred to private organizations with the assistance of the transportation ministry and the National Science Council.
The task force also asked the transportation ministry help improve the airline's safety record and supervise the selection of the best management team.
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