TAIPEI: Taiwan’s troubled TransAsia Airways said Tuesday it would close down after two deadly plane crashes, massive financial losses and an insider trading probe.
Board members reached the decision at a hastily called meeting, with all flights immediately axed.
Chief executive officer Liu Tung-ming bowed in a sign of contrition as he told reporters of the “painful” decision.
“I’m sorry that our recent efforts could not meet public expectations,” Liu said.
“The board meeting convened today has approved the decision to dissolve the company and suspend all flights from today.”
The decision will be formalized by a shareholders’ meeting next January.
“We choose to dissolve the company at this time when we are still able to take care of our employees and passengers,” said chairman Vincent Lin.
He promised to fully refund all tickets and said the suspension of flights was estimated to affect 100,000 passengers.
The dramatic crash of flight GE235 in February 2015 grabbed global headlines as car dashcam footage showed it clipping a road bridge and careering into a river shortly after take-off from Taipei, killing 43 people.
An investigation blamed a catalogue of pilot errors, with one found to have mistakenly switched off the only functioning engine after the other had failed.
It came just seven months after another jet slammed into trees and houses near Magong city on Taiwan’s scenic Penghu island, leaving 48 dead.
The pilots were flying below the minimum altitude required in poor visibility in a procedural mistake widespread among TransAsia’s pilots at the time, the Aviation Safety Council said in its investigation report.
TransAsia, Taiwan’s first private airline, was set up in 1951. It said it had introduced six training programmes following the two crashes.
But despite moves to combat safety fears, it incurred losses of Tw$1.1 billion ($34.38 million) last year as load factor plummeted to 20 percent.
Those losses widened to Tw$2.2 billion in the first three quarters of this year, and in October its budget airline V Air folded.
Its woes were exacerbated by a slump in Chinese tourists as relations with Beijing worsened under Taiwan’s new president Tsai Ing-wen.
Lin said the airline currently incurs a daily loss of Tw$10 million even though load factor has improved to around 60 percent.
TransAsia is also now mired in a probe over share trading.
Lin and two executives were questioned by prosecutors early Tuesday after the Taiwan Stock Exchange warned of “apparent” insider trading in Monday’s session, as rumours began to swirl that the firm was going under.
Trading volume in the company’s shares on Monday was nearly 27 times higher than on Friday.
“We answered questions as witnesses to clarify the case … I didnt sell any stocks (yesterday),” Lin said.
TransAsia currently operates a fleet of 16 passenger aircraft serving 27 international, Chinese and domestic locations. It has a staff of 1,795 and assets worth around Tw$5 billion. AFP