StarLux clears legal hurdle to start operation

Taipei, StarLux Airlines, a company that is being set up by former EVA Airways Chairman Chang Kuo-wei (???), said Thursday that it will apply for an operation license next week following the government's move to ease the regulations on the establishment an airline company in Taiwan.

StarLux spokesman Nieh Kuo-wei (???) said the required documents will be submitted soon to the Civil Aeronautics Administration (CAA) to apply for an air operator certificate (AOC).

The recently revised Regulations of Civil Air Transport Enterprise require aspiring businesses to show funding of at least NT$6 billion (US$204.6 million) and possession of at least three aircraft before they can gain approval to operate scheduled or non-scheduled air carrier service on international routes.

However, enterprises are no longer required to have at least five years operational experience in international transportation or commerce before they could become eligible to apply for an AOC, which was the main hurdle for StarLux.

The CAA changed the regulations on the ground that they had been instituted for more than 20 years and had become outdated.

StarLux is being set up by Chang, who was chairman of EVA Air from 2013 until 2016 when he was ousted in a war of succession after the death of his father, Evergreen Group founder Chang Jung-fa (???).

Asked about StarLux's efforts, CAA head Lin Kuo-shian (???) said the company would be entering a very promising but highly competitive aviation market in Taiwan.

"International Air Transport Association (IATA) and Boeing have made positive market forecasts about Asia-Pacific, which means Taiwan is well-positioned as a growing market," Lin said.

According to IATA's latest 20-year air passenger forecast, 7.8 billion passengers will travel globally in 2036, almost twice the estimated 4 billion in 2017.

More than half the global growth will be in the Asia Pacific region, accounting for some 2.1 billion new travelers in 2036, the IATA said.

Meanwhile, Boeing has forecast that Northeast Asia will sustain an average annual economic growth rate of 1.2 percent over the next 20 years, which will help drive an average 2.2 percent growth of passenger traffic through to 2036.

The passenger traffic sector is also likely to be supported by a significant increase in low-cost carriers (LCCs) in the region and an uptick in the number of new markets served, it said.

The growing budget carrier business in the region is exactly what is driving the market, according to Lin.

He said that in 2017, Taiwan collected some NT$2.05 billion (US$69 million) in fees from foreign airlines passing through its Flight Information Region (FIR), an annual increase of 13 percent.

A significant percentage of that revenue came from LCCs like Malaysia-based AirAsia and Japan-based Vanilla Air, which use Taiwan as a hub, Lin said.

There are now 602 round-trip flights per week from Taiwan to Southeast Asian countries, 580 to China, and 700 to Japan and South Korea combined, he said.

"Air traffic near Taiwan is on an uptrend," he said.

Airlines such StarLux, however, are likely to face increasingly fierce competition as more foreign carriers resume services to Taiwan, Lin said.

For instance, Air Canada restarted flights between Taipei and Vancouver last June after 14 years and has been seeing a load factor of around 85 percent on its daily flights, he said.

Air France is returning to Taiwan in April after a suspension of 20 years, offering three flights per week between Taoyuan and Paris, while Air New Zealand will operate five direct flights per week between Taoyuan and Auckland, starting in November, after a break of 13 years, Lin said.

Source: Focus Taiwan News Channel