Taiwan's second-tier airlines have set their sights on Malaysian destinations in the wake of the open-skies accord signed in October 1997 between the two countries. The airlines face saturated domestic markets, steady increases in capacity and a slight decline in overseas travel.

UNI Air hopes to fly from Kaohsiung to Kota Kinabalu and Langkawi by April, says K W Nieh, junior vice-president of parent company EVA Airways. Meanwhile, Far Eastern Air Transport (FAT) has targeted flights from Taipei to Kota Kinabalu, Kaohsiung to Langkawi, and Kaohsiung to Penang. FAT will take delivery of three new Boeing MD-80s by the end of March, which it plans to use on the Malaysian routes, says corporate planning manager Jack Shih. TransAsia Airways has yet to decide on its Malaysian routes, but is focusing on Kota Kinabalu.

FAT made a $25 million profit in 1997, but Formosa, Great China Taiwan Airlines and UNI are struggling to break even, while TransAsia and U-Land, the only airlines not affiliated with either EVA or China Airlines, posted losses. TransAsia reportedly lost more than $30 million in 1997, with load factors below 50% in the last three months of the year. Only the intervention of two new investors kept the airline afloat, says a source.

Meanwhile, the airport at Hsinchu, the centre of Taiwan's high-technology industry, opened on 1 January. Two daily flights to Kaohsiung, plus one to Kinmen, an island off China, are the first regular routes. By March, five more will be added to the airport's schedules.

Source: Flight International