Taiwan’s Civil Aeronautics Administration (CAA) is in negotiations with a potential investor to take over ailing domestic carrier Far Eastern Air Transport (FAT).
The regulatory body took away FAT’s domestic traffic rights last week and the airline’s operations have been grounded since 13 May due to mounting debts. The carrier’s owners have tried unsuccessfully to attract new investors and revive the business, and its employees have been protesting the potential closure in Taipei’s streets for the last few day.
CAA director Billy Chang was quoted in Taiwan’s Central News Agency as saying that negotiations with the unidentified potential investor began on Monday. Further details, however, were not revealed and calls to the FAT offices in Taipei went unanswered.
FAT’s bankruptcy protection expired on 22 May and the carrier took was a step closer to become insolvent in end-May after a Taiwanese court rejected an extension. The news agency reported earlier this year that FAT disclosed debts of NT$9.99 billion ($315 million) as of the end of September 2007.
The airline’s business has been adversely affected by the decline in Taiwan’s domestic air travel market that was brought on by the introduction of new high-speed trains. Rising oil prices pushed the carrier over the precipice in May, with the management deciding to stop operations after running out of money to buy jet fuel.
FAT was operating domestically and internationally to countries such as Cambodia, Japan and South Korea using its fleet of Boeing MD-80 series aircraft and Boeing 757s.
Source: Air Transport Intelligence news