The government would spend at least NT$30 billion (US$990.9 million) to bail out the nation’s airlines amid the COVID-19 pandemic, Minister of Transportation and Communications Lin Chia-lung (林佳龍) said yesterday.
The effects of the global coronavirus outbreak on the airline and tourism industries have been greater than what the Ministry of Transportation and Communications (MOTC) had estimated, Lin said on the sidelines of a meeting of the Legislative Yuan’s Transportation Committee, adding that the repercussions are expected to linger for some time.
The nation’s airlines have experienced financial difficulties, as an increasing number of countries restricting the entry of travelers to combat the pandemic has led to reductions to international flights, he said.
Photo: Peter Lo, Taipei Times
As airlines are large corporations and require significant operating capital, Lin said that the ministry has proposed that the Executive Yuan hold an interdepartmental meeting to discuss how the government can help over the next six months.
It would take at least NT$30 billion to bail out the nation’s six airlines and the ministry would help secure loans to replenish their working capital, he said.
The exact sum of such a bailout would be decided at a Cabinet meeting today, he added.
“We will also ask airlines to submit plans to improve their operations. In the past, they might have encountered problems that caused them to bear heavy financial burdens. This is particularly the case with the China Airlines,” Lin said.
“This is a perfect opportunity for China Airlines to address its operational issues. It cannot ask for a bailout without conducting corporate reform,” he added.
As travel agents are unable to organize tours, the government has helped them secure loans or provided subsidies, while NT$800 million has been budgeted for travel sector workers to upgrade their professional skills, and that amount could also be increased, he said.
The ministry has also budgeted NT$4.86 billion to assist airlines, duty-free shops and other service operators in the nation’s airports, including a NT$578 million disease prevention subsidy.
The Civil Aeronautics Administration on Tuesday night said that airlines could apply for assistance through the NT$4.86 billion buget, and that part of the funds would be used to subsidize interest on loans airlines obtain to pay workers’ salaries for one year.
The subsidy was calculated using the interest rate of a one-year Chunghwa Post savings account, the agency said.
The disease prevention subsidy would be used to purchase masks and ear thermometers, as well as to disinfect aircraft, it said.
The disease prevention subsidy is capped at NT$4,500 per international or cross-strait flight, and NT$2,500 for domestic flights, it added.
In other developments, Taiwan International Ports Corp said that it would offer cruise ship operators subsidies for nine months to pay for seaport terminal facility leasing fees under a program that would last until June 30 next year.
As soon as the Central Epidemic Command Center allows cruise ships to dock in Taiwan again, cruise ship operators would also receive a subsidy covering 50 percent of docking fees per voyage, it said.
Operators could receive incentives of between NT$2 million and NT$6 million per voyage if more than 30 percent of the passengers are non-Taiwanese, it said.
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