TROUBLED FAR EASTERN AIR PULLS OUT OF PALAU

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Hotels face downturn in Taiwan visitors

By Bernadette H. Carreon

KOROR (Palau Horizon, May 19, 2008) — The financially troubled Far Eastern Air Transport stopped operating in Palau Wednesday. President Remengesau said in a statement that this is a major issue he will bring up when he meets newly elected Taiwan President Ma Ying-jeou later this month.

The president in a statement said that the Taiwan-Palau route contributes to the Palauan economy.

Tourists from Taiwan have been the top market for years bringing in thousands of tourists every year.

Several hotels which rely on the Taiwanese market are saddened by the news and admitted that it will impact the operations.

Facing economic difficulties, FAT suspended its Taiwan-Palau flights this week.

Remengesau said that it is expected that this suspension will be temporary.

A press statement from the President’s Office said that there are reports that an investor stands ready to take over the airline and that a court hearing is scheduled for May 22 to approve the take over and if approved, flights could begin again as early as May 24.

Remengesau is in Israel and will fly to Taiwan to attend Ma’s inauguration on May 20.

Taiwan Ambassador Matthew Lee told reporters that the Taiwan government will also ensure that the route will be reopened even if the FAT situation will not improve.

Lee said that a new airline may step in such as Taiwan’s China Airline.

"The route is very important in the relationship between Palau and Taiwan," Lee said.

"With the new Taiwan president we hope we can reopen the route," he added.

He said the crisis could open a new opportunity for both countries adding that the Taiwan China Airlines have more routes around the globe.

Presidential Chief of Staff Billy Kuartei said that Palau’s Bilateral Air Service Agreement with Taiwan allows for the other airlines to be designated by the Taiwanese government to fly from Taiwan to Palau.

"We cannot overstate the importance of regular flights from Taiwan to Palau. These flights are critical component of our economy and of our close relationship to Taiwan, and we will do whatever we can ensure that our Taiwanese friends can continue to come to Palau on a regular basis," Kuartei said.

FAT canceled all of its domestic routes at the start of the week but dispatched four international flights — Taipei-Jeju, Taipei-Palau, Kaohsiung-Jeju and Kaohsiung-Laoag — to bring some of the Taiwanese tourists home.

Lee said that Wednesday , FAT brought the remaining tourists home.

Palasia Hotel, said that if the problem continues they are seeing a cancellation of about 700.

Papago Hotel Manager Douglas Topous said that since the Taiwan tourists is a major market for the hotel it is concerned about the situation but is hoping that flights will resume as soon as possible.

Belau Tourism Association (BTA) President Lucy Sugiyama said businesses which rely mostly on Taiwan tourists will be impacted by the airline’s pullout.

She said it could have a domino effect

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