The Taoyuan International Airport Corporation is facing its first bankruptcy crisis in the company's 11-year history as the airport has been hit hard by the pandemic.
The airport is empty. Taoyuan International Airport has been hit hard by the epidemic and strict border control. The passenger number last year plummeted to a mere 2 percent of the 2019 volume. The airport relied on loans to survive. It is estimated that the airport will borrow more than NT$10 billion in March. The total construction cost of the third runway is more than NT$130 billion and the airport is facing its first bankruptcy crisis since the company's establishment 11 years ago.
Hung Yu-fen, Senior Vice President, Taoyuan International Airport Corporation: “So far we have probably borrowed more than NT$7 billion. We expect that by March, based on our project progress and related plans, we may accumulate about NT$10 billion in borrowings.”
Taoyuan Airport has been operating for more than 40 years. It transformed into a company in November 2010. Prior to the virus outbreak, the company made money every year and its accumulated profits exceeded NT$50 billion. After the outbreak, Taoyuan Airport suffered losses for the first time in its history in 2020. The company has slowly been borrowing money since 2021 just to continue operations. The airport company has said that losses are inevitable without passengers. It is also frank that its current financial situation is not very good.
Passenger: “(What do you think the current crowd compared to before?) A big difference. (What do you mean?) There are very few passengers.”
Hung Yu-fen, Senior Vice President, Taoyuan International Airport Corporation: “The epidemic started in about February 2020. Passenger arrivals of over 48 million from that time dropped to about 910,000 people in 2021. It's only about only 2 percent of arrivals left.”
The airport was originally the country's cash cow but the number of passengers has plummeted and there is no income. The company is also under pressure to start paying for the Terminal 3 Construction Project. The Airport Corporation's capital is NT$24.8 billion. If its debt exceeds its capital, the company will face bankruptcy. Taoyuan Airport said that at present, it is still impossible to predict when the epidemic will stop and when the aviation industry will recover. Diversified financing plans have been drawn up, including borrowing, issuing corporate bonds, and adjusting its fee standards. They will also seek a capital increase from the Ministry of Transportation and Communications to tide over the epidemic crisis.