Fate of TransAsia Airways hinges on board meeting: spokesman

The future of financially troubled carrier TransAsia Airways will hinge on an extraordinary board meeting to be held at 9 a.m. Tuesday, airline spokesman Liu Chung-chi (劉忠繼) said Monday.

“Prior to the meeting, I cannot disclose the proposals and the airline’s future direction,” Liu said.

He indicated, however, that the company will not file for bankruptcy, as its assets exceed its liabilities.

TransAsia Airways has suffered steep losses in the past 21 months and was forced to close its budget airline subsidiary V-Air on Oct. 1 because it was bleeding money.

Early this year, TransAsia sold TransAsia Catering Services Ltd. (復興空廚) to an affiliate for NT$525 million (US$16.47 million) in a bid to raise funds to improve flight safety and expand operating capital.

The catering and support services subsidiary was sold to Taiwan Secom Co. (中興保全), the carrier’s affiliate under the SIGMU Group.

It also suspended the use of four Airbus 330 aircraft and has sought to lease out or sell them by the end of the year. At the same time, it has phased out ATR 72-600 planes or sold them and then leased them back to improve its financial situation.

TransAsia Airways has been able to improve its load factor to 67 percent this year from 61 percent in 2015, but it has not been enough to turn the airline’s flagging fortunes around.

After posting consolidated net income of NT$304.9 million in 2014, it ran a net loss of NT$1.16 billion in 2015 and a net loss of NT$2.2 billion in the first nine months of 2016.

A resolution was passed at the company’s shareholders meeting this year to keep TransAsia Chairman Vincent Lin (林明昇) in his post, but the possibility of Lin asking to step down from the post cannot be ruled out, sources said.

The management of the company would then be left to professional managers, the sources said.

TransAsia Airways will be fined NT$1 million for its abrupt announcement to suspend flights for one day, which reportedly will affect around 5,113 passengers, according to Taiwan Stock Exchange.

TransAsia issued a statement Monday saying that it would provide refunds to passengers and will ask other carriers to help arrange for their transport.

China Airlines and Eva Airways have said they will help fly TransAsia passengers back to Taiwan.

The Taiwan Stock Exchange said, meanwhile, that after the media reported the airline’s planned suspension of its flights early Monday, the airline should have followed procedures and convened a news conference to make public any material information.

But the airline did not do that, and TWSE Chairman Shih Jun-ji (施俊吉) accused the carrier of “gross insider trading.”

The exchange said it will work with the Ministry of Justice to conduct an investigation.

Cabinet spokesman Hsu Kuo-yung (徐國勇) said 398,000 TransAsia shares were traded on Friday while 10.74 million TransAsia shares were traded Monday, an abnormal spike in volume.

Premier Lin Chuan (林全) has asked related government agencies, including the Ministry of Labor, the Consumer Protection Committee under the Executive Yuan and the Transportation Ministry, to step in and protect the air carrier’s workers and the interests of the passengers, and also clarify the reasons behind TransAsia’s suspension of flights Tuesday.

Source: Focus Taiwan News Channel

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