Taipei, May 13, 2008 (CENS)--Having run out of operating fund, Far Eastern Air Transport has announced suspending its operation starting today (May 12).

To settle the ensuing problems, the airlines will continue maintaining limited flight services today, thanks to fuel oil lent by CPC Corp. Taiwan, an arrangement made following a marathon emergent coordination meeting convened by Civil Aeronautics Administration, under the Ministry of Transportation and Communications.

The company will operate nine flights today, including three for the Taipei-Matsu route and nine international flights, the latter of which mainly for transporting their 2,000 overseas passengers back to Taiwan.

Large number of sold plane tickets will become invalid, amounting to 56,800 domestic-flight tickets and 22,200 international-flight tickets, totaling NT$173 million in value, as of the end of April.

The suspension of operation of the airline has sent a shockwave among travel agencies and its creditor banks, including Bank of Taiwan, Mega Bank, and King`s Town Bank, and Far Eastern Bank. The banking loans topped NT$4.1 billion. Mega Bank reported that it owned priority claim for its loans for the airlines and would dispose of the latter`s properties to settle the debt. Far Eastern Bank, the largest creditor bank with NT$980 million of debt claim, pointed out that it might abandon its previous application with the court to serve as the executor for the restructuring of the airlines, since the suspension of operation will lead to loss of fund and personnel, making it impossible to carry out the restructuring program. The airline is thus facing the fate of liquidation.

(by Philip Liu)