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TransAsia accident likely crashes its year-end budget carrier plan
Taiwan News, Staff Writer
2014-07-24 12:44 PM

Local carrier TransAsia Airways (6702) shares plummeted to its daily trading limits at NT$11.1 per share in Thursday’s opening session after its Flight GE 222, an ATR-72 aircraft, crashed during an emergency landing in Penghu a day earlier, killing 48 and injuring 10, as confirmed by the company in a statement early Thursday. The industry reckons that the accident might negatively affect its low-cost carrier plan.

TransAsia's general manager Chooi Yee-choong made an apology late Wednesday when speaking to the media at Taipei International Airport over the fatal crash of its Flight GE 222 that evening, vowing to provide assistance to the families of the victims.

Chooi said his company will make every effort to help the families of the victims deal with the aftermath of the crash and to assist with the Civil Aeronautics Administration's investigation into the cause of the accident.

The company stated that losses are covered in its insurance policy, including aircraft, passenger liability, third-party liability, cargo and luggage. All claims will be processed in accordance with international civil aviation conventions and regulations.

Media reported that a total of 8 insurance companies including Cathay Century Insurance will be jointly responsible for the claims from this accident. Cathay Century has reportedly set up an emergency response team to assist TransAsia to resume flying on the same route. Local media reported that domestic insurance companies might cover nearly NT$100 million (US$3 million) in total.

The market interprets this accident as a stumbling block for TransAsia’s low-cost carrier plan scheduled to start operation at year-end. Late last year, the company, which mainly serves passengers on regional and cross-strait routes, announced an investment of between NT$2 billion and 3 billion in a low-cost carrier subsidiary V air to meet rising demand.

China Airlines, the nation’s largest carrier, also announced a plan late last year to develop a new budget carrier Tigerair Taiwan through a partnership with Singapore-based Tigerair.

In addition to its budget carrier plan, one airliner was quoted by local media as saying that TransAsia might lose ground to other airline companies in its overseas destinations expansion plan after this air tragedy.

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