Whats going on with Trans Asia Airways?
Went kaput. CEOs ran away with the piggie bank. Thousands on the street with no job.
Cost cutting in safety measures came to bit them in the most vulnerable place and with two crashes and no government “support”, it collapsed. Bad myopic management. Kaput.
All flights cancelled? I was flying with them on Friday from China. Buggers
My partner and I were going to book flights to Japan with them yesterday as the fares were very good. After checking on hotels we came back to book the tickets - only to be greeted with a “Sold Out” message on every date we checked. Then it progressed to the point that it wouldn’t load. A few hours later we found out why. Seems we were lucky as word is 45 days for refunds (though a Credit Card Chargeback can fix that).
So Cathay got our money in the end.
Workers left completely in the dark. Hard to believe the Ministry of Transport didn’t have a clue.
Did the CEOs literally run off with the piggybank? Are people like kelake likely to get their money back?
Directors are from an industrialist family, Lin jia. They have other interests, insurances and concrete.
They aren’t short of money, but the airline was heavily in debt and burning money hand over fist. This part of the family is going to be a lot poorer and now under investigation for insider trading.
Seems they like they didn’t have friends in the DPP admin, did anybody notice massive govt support for the near bankrupt shipping industry recently?
But it could simply be that the airline was due for the chip due to its extremely poor safety record.
Lots of allegations that the CEO expanded too fast and they didn’t train the pilots properly.
Luckily I applied and received a refund. I’m sure it was no coincidence that the airfare for this route with other airlines was more than double today than what it was yesterday. Luckily I found a way around that and it won’t turn out to be much more expensive. Just have to leave work a bit earlier than planned.
My coworkers were spinning the typical Taiwanese family business tale: someone died, the heirs did not know what to do.
I fear for EVA.
EDIT
The workers are really pissed because until yesterday, they were left in the dark. Their press corps were denying there was any problem, telling the press snd public that they would work on. But the board, the directors, the inner circle, meanwhile, were profiting from the downfall.
wow. You got lucky. It seems when airlines go under, passengers generally get the sticky end of the stick.
The two accidents cost a lot of money, think i read something like 40 million usd compensation. Plus the govt not allowing new services to start for a year also made their 4 large Airbus 330 redundant. Think they were able to sell at least two of them?
Guess they should have been smarter and not bought any planes, just lease them like many smaller airlines.
Lease the planes, get the engine manufacturer to pay for engine maintenance on a program and contract out most other maintenance. Then price tickets accordingly?
Must not have been that simple. The airline business is a great way to make a million…as long as you start out with a Billion and are prepared to lose hundreds of millions, is what they say.
Course a lot of American airlines are making money for the first time in many quarters.
The returns versus the risk is very small.
Even EVA regularly has to refinance their debt.
They have sales of more then one billion USD and are just happy if they clear 60 mil USD in a year (EVA).
Previously EVA could look to their shipping arm for a cash injection but now shipping is looking to be in danger of red ink as well.
Times are tuff for shipping and many airlines.
Some blue voices are crying it’s the green party’s fault. The airline only lost NTD1.1 billion in 2015 under the KMT’s administration, but under the Tsai administration, lost NTD2.2 in the first three quarters of 2016 alone!
EVA Air and its subsidiary Uni Air announced that they would offer stranded travelers a 50 percent discount on tickets.
Yes, declining mainland visitor numbers and all that… But why didn’t they apply for “disaster zone relief” like those tour companies did? 
Of course those declining Chinese tours money… wait, that was not their core market, and anyways, the decline in real numbers is not that bad. Something is fishier…
Following the announcement, employees face being laid off.
The airline had 1,795 employees registered under the national labor insurance program as of the end of October, according to the Ministry of Labor.
However, according to relevant regulations, employers are required to file an application with the labor affairs authorities at least 60 days before implementing any mass layoff.
While TransAsia Airways sustained more than NT$2.2 billion in losses in the first three quarters of this year, the company’s net asset value at the end of October stood at NT$5.44 billion, representing net asset value per share of NT$7.17, said Chen Yi-chieh (陳逸潔), a spokesman for TransAsia Airways.
Chen said that the company has a NT$1.2 billion mutual trust, NT$600 million of which will be used for employee severance payments and the other NT$600 million for passenger compensation.
In addition, the carrier on Monday secured a freeze on trading in its shares, which will remain in place unless the company applies for trading to resume, according to law.
The stock will be delisted once the company is dissolved.
They did this announcement to calm the waters.
My neighbor worked for them. Morale was bad after the accidents, but they kept on. The thing is, China Airlines, for instance, depended on government moeny to survive after its accidents. EVA also has a cash reserve… so far. But the smaller local airlines have struggled since the HSR opened. East coast and outer islands markets were their niche. They did try to expand to Japan and even China, but with their smaller operations, that was not going to be cost effective. Going against the low cost airlines with stiff management practices? Kaboom.
The government was kept out of the loop, as was their employees. As a matter of fact, the airline will be fined because it applied for permits and kept on trading even though they were already sinking - water to their necks. Or were they? If the management stands to make more money by closing shop, why bather working?
EDIT
TransAsia had more passengers in the first three quarters of this year than it did last year and in 2014, suggesting that Chinese tourists had “little effect” on its business, DPP Legislator Wang Ding-yu (王定宇) said.
“TransAsia’s sudden suspension of flights and ensuing dissolution should be seen as a reflection of its flight safety practices, corporate mismanagement and the allocation of its funds. It is not a situation that can be attributed to a single factor,” Wang said.
From Taipei Times article above
And
The administration’s Air Transport Division Director Han Chen-hua (韓振華) said the agency has monitored TransAsia’s progress in addressing aviation safety issues following two plane crashes in 2014 and last year.
TransAsia’s financial status has also been under the agency’s scrutiny, he said, adding that the airline is obligated to submit certified quarterly reports for review.
“Based on last month’s figures, TransAsia does not face any immediate financial risks. As of today, the company has more than NT$10 billion [US$313 million] in cash and its stock is worth NT$7 per share,” Han said.
“Unlike Far Eastern Air Transport, TransAsia did not choose to dissolve its business because it is unable to pay its employees’ salaries. It decided to dissolve its business because it did not see how to turn the business around,” he added.
There are about 10,000 travelers stranded overseas because of TransAsia’s suspension
Same source
1 Like
Meeting between TransAsia management, workers breaks down
http://focustaiwan.tw/news/asoc/201611230007.aspx?
“Management also would not allow any audio or visual recordings of the meeting, and members of the union had their cell phones taken away, with some of the phones even being taken to other rooms.”
"Meanwhile, banks that provided loans to TransAsia Airways said they have started standard operating procedures to secure their loans, estimated at around NT$11 billion (US$345.08 million). "
Maybe I wasn’t so lucky. I applied for a refund through the online travel agent and it was accepted. I then booked a new ticket with Uni Air. Happy that upon arriving at the airport I had beat the hoards of Chinese tour groups, Uni air then told me my ticket was cancelled by the travel agent. Wasn’t so happy anymore.
The flight was full and ticketing closed. Couldn’t even get a business class ticket. But while talking to EVA a representative told a couple people cancelled, and so I went outside security and bought yet another ticket. Got through security with loads of time.
I get to the gate and the airline announced that there would be a 2 hour delay till take-off due to the Chinese airfarce closing the airspace while they screwed around. They still loaded the plane, fed us, and I got to listen to people hacking for 2 1/2 extra hours.
Heard China Airlines was being drafted to fly all those people with transasia tickets for the next few months?
So we have the guys that own FAT and the former executive at EVA wanting to take over TransAsia but the govt doesn’t seem impressed with their bids.
Shouldn’t they be heard? IF a viable plan (ie with lots of cash) is tabled , should not someone else be allowed to give it a go?
They would have to buy the airline from TransAsia of course.
Chang , formerly of EVA seems unintersted. Preferring to set up yet another airline.
Government officials have stated that TransAsia’s routes (including the lucrative ones to Shanghai etc) have been stripped away. Without these routes, I doubt there will be a “viable plan” to take over the corpse. Given their atrocious safety record and terrible brand reputation, this is probably not a bad thing. More sharply: good riddance.
In the meantime, I hope that the decent people who worked for this awful company can land better positions elsewhere.
Guy