Taiwan’s aviation, tourism sectors hit hard by coronavirus epidemic

CNA file photo

TAIPEI (CNA) — Airline companies and travel agencies in Taiwan are facing difficulties amid falling demand due to the COVID-19 coronavirus outbreak, while travelers have been expressing frustration at having to cancel or postpone their trips.

In an internal letter to its 10,000 employees on Monday, China Airlines (CAL) said the impact of the epidemic has been like an “avalanche,” and it asked for understanding and cooperation if the situation worsens and tighter measures become necessary.

CAL has already cut salaries at the management level by 10 percent and has been asking its employees to take special leave.

“Even when the epidemic ends, the company will need more time than before to recover,” the letter reads, citing previous crises such as the SARS epidemic in 2002.

According to CAL, it has so far canceled nearly 3,000 flights scheduled for March, about 49 percent of its total number for the month, and another 2,100 flights, or 33 percent, that were booked for April.

The recent escalation of the COVID-19 in neighboring countries has exacerbated the situation, as CAL routes to Japan, South Korea and across the Taiwan Strait account for 51 percent of its total services, the carrier said.

Meanwhile, the other major Taiwanese carrier EVA Airways has also been encouraging its employees to take time off amid continued low travel demand.

EVA said it has asked the government to implement bailout plans for the aviation industry.

The outlook is even more dismal for travel agencies, which are absorbing pressure from consumers, airlines and upstream tour operators.

Under Taiwan law, travelers are eligible to receive compensation if they choose to cancel their trips based on official travel warnings, but that often leads to disputes.

For example, based on a Level 3 travel warning issued by the Central Epidemic Command Center (CECC), which urges people to avoid unnecessary travel to a destination, travelers can obtain a full refund, minus an administrative fee, if they cancel their trips.

Cancellations based on a Level 2 warning allow a minimum 95 percent refund, while the refund for those based on the lowest warning of Level 1 are calculated on a scale that takes into account how far in advance the ticket was canceled. In both situations, administrative fees are not refundable.

One of the most contentious issues in that system is the calculation of administrative fees, according to Wu Mei-hui (吳美惠), secretary-general of the Travel Quality Assurance Association (TQAA).

Wu said travel agencies sometimes cannot return that fee because they have made payments to upstream tour organizers and cannot obtain a refund, but the travelers get upset about it.

If the impact of the coronavirus lasts until June, the amount of money related to travel disputes is likely to exceed NT$10 billion (US$332.6 million), she said.

Travel agencies are at risk because of the slowdown in cash flow, Wu said, forecasting the closure of about 500 travel agencies in Taiwan by the end of June if the coronavirus situation persists until then.

If the epidemic lasts into the second half of the year, more than 90 percent of Taiwan’s 3,900 travel agencies might be forced to close, she said.

The current situation is also causing frustration among travelers, who are losing money and have had their plans disrupted.

Lin Shih-chun, an independent traveler, said she paid NT$2,000 to cancel a Feb. 24 trip to Tokyo, two weeks ahead of schedule, due to a Level 1 warning for Japan.

Lin said she was worried about the epidemic and the possibility of quarantine measures upon return to Taiwan, if the coronavirus situation in Japan worsened.

Evelyn Huang (黃詩媛), who had booked a group tour to Japan, canceled her trip to the Historic Villages of Shirakawa-gō and Gokayama on Feb. 28, saying she was postponing any overseas travel until summer.

Although she canceled the Japan trip a month in advance and managed to get a refund, Huang said, she was upset about not being able to go on the much anticipated tour.

“It is terrible, but what can we do?” she said.