Far Eastern Air Transport (FAT), the Taiwanese carrier that has suspended all its operations because of financial problems, has taken a step closer to bankruptcy with a Taiwanese court rejecting FAT’s application for an extension of its bankruptcy protection.
FAT’s bankruptcy protection expired on 22 May and an FAT spokesman says “the court made the decision to reject the application”.
He says FAT would like to apply again for bankruptcy protection but there may be too little time to get a positive decision from the courts.
According to the spokesman the airline’s creditors have so far refrained from taking action against the airline “because most are supportive and want FAT to continue”.
The spokesman says the airline’s owners now face mounting pressure from the Taiwan Government, news media, unionists and the general public to come to a final decision on whether to inject more money into the business to save it.
“We are waiting for this key decision this week”, he says.
FAT has stopped paying employee salaries but the staff are still on duty because they want to try and save the company but there are some that are saying they cannot hold on much longer, he adds.
The spokesman says the airline’s owners are still working to try and bring in some new investors to recapitalise the business.
“AirAsia has shown a high interest in our company but has still not come to a decision.”
The spokesman also says: “Some investors from Singapore were due to arrive yesterday” for meetings “but I’m not sure if they were from Jetstar Asia or some other” parties.
Industry sources told flightglobal.com's sister premium news site, ATI last month that Singapore-based low-cost carrier Jetstar Asia was considering buying into FAT.
FAT had its last flight on 13 May and suspended operations due to financial difficulties.
It owns all its aircraft with the exception of three. The spokesman says two of the three leased aircraft have since been returned to the relevant lessors but he was unable to name the lessors.
Source: flightglobal.com's sister premium news site Air Transport Intelligence news