TAIPEI (CNA) — Far Eastern Air Transport Corp’s (FAT) sudden decision to end its flight operations with effect from Friday is expected to inconvenience 3,408 passengers, while the airline may face a fine of up to NT$3 million (US$ 97,975) for not meeting its flight commitments, government authorities said Thursday.
According to the Tourism Bureau, 3,251 people in 120 tour groups had already booked scheduled FAT flights for Friday or later dates.
Another five tour groups, with 157 people, had taken FAT flights on overseas trips and were scheduled to return to Taiwan on the carrier, the bureau said in a press release after FAT announced earlier in the day that due to financial difficulties, it was ending its service with effect from Friday.
At a joint press conference with the Civil Aeronautics Administration (CAA), however, FAT Deputy General Manager Huang Yu-chi (黃育祺) said the airline was simply “suspending” its flight operations temporarily due to a shortage of funds, which he estimated at NT$30 million.
Huang promised to protect the rights of the company’s 1,000 employees and said FAT had contacted the Taipei City Department of Labor to discuss layoff issues.
The Ministry of Labor (MOL) said earlier Thursday it had not received any notice from the Taipei-based carrier about an imminent major layoff, as required by law.
The Taipei City Department of Labor, meanwhile, said if the airline proceeds with a major layoff without giving the required 60-day notice, the matter will be reported to the MOL, which in turn might bring legal action against FAT Chairman Chang Kang-wei (張綱維) and bar him from leaving the country.
In a statement, the CAA said it has been monitoring the financial situation of the debt-strapped FAT since 2017 and recently discovered that the airline was short of funds.
The Taipei-based medium-sized international carrier is behind in its loan payments, the CAA said, adding that it has been trying without success to contact Chang.
Huang also said that he has been unable to reach Chang since Wednesday.
Chang will liable to a fine of NT$200 million and a maximum prison sentence of three years if the airline does not provide service for flights booked on Friday, the CAA said, citing the Civil Aviation Act.
Under the act, the carrier is also facing a fine of NT$3 million for failing to give 60 days’ notice of its plan to suspend operations, the CAA said.
The CAA also called on the airline to make sure it provides return flights for the 500 Taiwanese passengers, including individual travelers, who are overseas and are booked on FAT return flights.
Established in 1957, FAT declared bankruptcy in May 2008 but resumed operations three years later and completed bankruptcy restructuring in October 2015.
FAT has been operating on 62 domestic and international routes to 47 cities in Southeast Asia, South Korea and Japan.
It is also one of three domestic airlines that fly between Taiwan proper and the outlying islands of Penghu and Kinmen.
In anticipation of an increase in demand during the week-long Lunar New Year holiday at the end of January, the CAA said two other domestic carriers, UNI Airway and Mandarin Airlines, have agreed to offer more flights.
On Thursday, anxious passengers were seen waiting in long lines at FAT counters in Taiwan airports, while many expressed anger about the airline’s decision to close operations.
Also on Thursday, Taiwan Cooperative Bank, the largest lender to FAT, said the airline’s outstanding loans there totaled NT$2.2 billion.