TransAsia Airways has announced that it will cease operations permanently and enter into liquidation.
At a press conference in Taipei, the airline’s chairman Vincent Lin said that despite efforts to restructure the company, following two fatal turboprop crashes in recent years, TransAsia has continued to bleed.
“In the last three quarters we recorded a loss of over NT$22 billion ($62.7 million). After two days of meeting, the board has no choice but to make the painful decision of shutting the airline,” he told a room packed with media.
Lin adds that the airline was, up until yesterday afternoon, still trying to secure capital from potential strategic investors. The board eventually voted to shut down the carrier completely.
"To choose to dissolve the company at this time is based on the fact that the company's current assets are still worth more than its liabilities, and that we are able to provide the necessary protection to the interests of our passengers, employees and associated partners," says Lin.
Going forward, Lin says that shareholders must approve the proposal to dissolve the airline. Thereafter, it will enter into liquidation.
Flight Fleets Analyzer shows that TransAsia has 19 aircraft in service – six Airbus A320s, five A321s and eight ATR 72s. It also has four Airbus A330s, one A321 and one A320 in storage.
The A320 family jets are owned by MCAP Europe, Aviation Capital Group, COF III Dutch Holdings, SHNTN 2015-1 ABS Portfolio, Aircastle Advisor, BOC Aviation and PAFCO 2914. TransAsia owns all but two of its ATR 72s, which are leased from Nordic Aviation Capital and GECAS.
TransAsia was set up in 1951, and was the third largest operator in Taiwan after China Airlines and EVA Air. Its business was however badly impacted by its two fatal turboprop crashes in 2014 and 2015. In October, it also had to shut down low-cost unit V Air.
Signs of trouble could already be seen earlier this year when the carrier had trouble taking deliveries of its aircraft on order. Sources told FlightGlobal that there were issues in securing financing and that local banks were unwilling to be involved considering the airline's losses, lack of a clear restructuring plan and poor prospects.
TransAsia reported a net loss of NT$2.09 billion for the first nine months of the year, ballooning from a loss of NT$538 million a year ago.