CAA to review FAT service resumption petition next week

Taipei, Dec. 14 (CNA) The Civil Aeronautics Administration (CAA) said on Saturday that next week it is set to review a service resumption petition submitted by Far Eastern Air Transport Corp. (FAT), after the airline made a surprise announcement Thursday that it would stop all flights from Friday, citing financial problems.

The CAA confirmed that FAT, a mid-sized international carrier in Taiwan, has submitted a petition to the agency indicating a desire to resume services after FAT Chairman Chang Kang-wei (張綱維) said Friday, the day operations stopped, that FAT is now looking to restart flights after the company receiving undertakings of new funding.

The CAA said the review of the FAT petition will start on Dec. 16.

FAT Vice President Huang Yu-chi (黃育祺) said Thursday that the carrier had a shortfall of about NT$30 million (US$993,377) in capital to continue operations after years of losses and difficulties in raising funds and so decided to stop services from Friday.

Huang added that the company had attempted to contact Chang before making the announcement, but failed to do so.

However, Chang held a news conference Friday, at which he said FAT has covered operational costs without owing money, including employee salaries, and that since new funds for future operations will become available next week, he wanted services to resume Friday afternoon, the same day the company suspended all flights.

Following Huang's surprise announcement that all FAT flights would be suspended on Friday, the CAA issued a notice fining the carrier NT$3 million for failing to meet its flight commitments and another notice revoking the airline's civil aviation flight permit.

FAT is entitled to submit a response statement by 5 p.m. Dec. 18.

Also on Saturday, Transportation minister Lin Chia-lung (林佳龍) told reporters that the CAA will review FAT's petition based on professional opinions and will not relax standards. Lin's remarks came after deputy minister Wang Kwo-tsai (王國材) said a day earlier that the Ministry of Transportation and Communications (MOTC) was willing to give FAT a chance to resume operations as long as the carrier can reassure officials that there are no concerns over finances and flight safety.

Lin said the confusion surrounding FAT undermined corporate governance and hurt the local tourism industry, so the MOTC has asked the carrier to prioritize the interests of consumers, passengers, travel agencies as well as its employees.

Thursday's announcement that all flights would be stopped had meant that more than 1,000 FAT employees would be out of a job from Friday.

In addition, the termination of flight operations would have impacted 3,409 passengers, including 3,251 people in 120 tour groups who had already booked scheduled FAT flights for Friday or later dates, and an additional 157 who took FAT flights on overseas trips but had not yet returned home.

Prior to Thursday's announcement that it was stopping services, FAT had been operating 62 domestic and international routes to 47 cities in Southeast Asia, South Korea and Japan.

When indicating the company was now seeking to resume operations on Friday, Chang said three groups of investors have pledged to inject funds into FAT next week so he saw no problems for the carrier to continue services, but he did not make public the names of the investors.

Chang has been barred by Taipei District Prosecutors Office from leaving the country after being summoned by prosecutors Friday for an investigation into the service termination announcement and the company's handling of funds to determine whether FAT has violated the Civil Aviation Act.

Local media reported Friday that FAT owes NT$2.2 billion to Taiwan Cooperative Bank.

New Power Party (NPP) Legislator Huang Kuo-chang (黃國昌) said Friday that the loan was used to finance a leasing company owned by Chang, while the FAT chairman has denied an accusation that he embezzled funds from the carrier.

Meanwhile, the Ministry of Labor said on Saturday that the Occupational Safety and Health Administration will launch a probe into FAT, inspecting the carrier's offices islandwide to determine whether the company has violated labor rules by laying off large numbers of employees, although Chang has said the carrier will continue operations with employment contracts still valid.

Established in 1957, the Taipei-based FAT declared bankruptcy in May 2008 but resumed operations three years later and completed bankruptcy restructuring in October 2015.