Taiwan Soon to Have a 3rd Major Airline Entering the Competitive Asian Skies

October 7, 2017 4:55 pm Last Updated: October 8, 2017 1:37 pm

The Taiwanese government has greenlighted an amendment to existing regulations that would allow the widely-anticipated startup company StarLux Airlines to become Taiwan’s third major commercial airline, operating beside the already well-known EVA Air and China Airlines.

StarLux Airlines was registered last year and founded by Chang Kuo-wei, the youngest son of Chang Yung-fa, the late business tycoon who took decades to create the Taiwanese transportation conglomerate Evergreen Group that encompasses Evergreen Marine, the fourth largest container shipping company in the world, and EVA Air, the second largest Taiwanese airline.

Before Chang Yung-fa’s death in 2016, Chang Kuo-wei was a trusted heir to his father’s multi-billion conglomerate and was the chairman of the EVA Air. He even completed pilot training and eventually worked his way to become a captain for the airline’s Boeing 777 fleet. The 47-year-old executive reportedly possesses rich technical knowledge of the industry and was well-liked in the company for his down-to-earth management approach.

Being the youngest and the only son born of Chang Yung-fa’s second wife, however, Chang Kuo-wei was outmaneuvered by his older brothers following Chang Yung-fa’s death in January 2016, who took away the corporate control of the Evergreen Group in the ensuing succession fight. He was then stripped of his executive title at the EVA Air, and the airline also soon took away his position as captain and grounded him from flying for “safety considerations.”

Chang Kuo-wei, the ousted former chairman of EVA Air, is building a new StarLux Airlines to be the third major airline of Taiwan. Photo shows an EVA Air jet with Hello Kitty livery at George Bush Intercontinental Airport on June 19, 2015, in Houston. (Bob Levey/Getty Images for Sanrio)

The ugly succession fight however further projected Chang Kuo-wei’s image in the eyes of the Taiwanese public as a young and energetic entrepreneur, in contrast to his older brothers, and Chang soon announced his intention to start his own airline. In November last year, Chang officially registered “StarLux Airlines” and started pursuing the required regulatory approvals for his airline to enter Taiwan’s tightly-regulated airline market.

On Saturday, Taiwan’s Minister of Transportation and Communications Hochen Tan said that he has approved an amendment to Taiwan’s “Regulation of Civil Air Transport Enterprise,” as reported by Taiwan’s CNA news. The change would scrap an existing clause that requires an aspiring airline to have “five years of operational experience in international transportation or commerce” to be considered for an international airline license in Taiwan. The change has been sought by Chang and his supporters since last year.

The Taiwanese public has largely welcomed Chang’s ambitious plan to roll out a third major airline, hoping that the addition of a new major airline would further improve competitiveness in Taiwan’s airline market. Taiwan currently has two major international carriers: The privately-owned EVA Air and the partially state-owned China Airlines, which is controlled by the Taiwanese government through majority shareholdings.

Chang recently revealed that StarLux aims to build a fleet of 24 aircraft with a staff of 3,500 within its first six years. It also aims for a fleet size of 50 aircraft and 7,000 to 8,000 staff within one decade. If achieved, it would easily put StarLux as among the major international airliners in the world, flying out of the already highly-competitive Asian market.

In a high profile talk given on Sept. 14, Chang vowed to make StarLux the “Emirates of Taiwan,” hinting that he will emulate the dramatic rise of Dubai’s carrier in the last two decades, which has grown from its humble beginning to become one of the largest airlines in the world.

Like the United Arab Emirates, Taiwan also has a relatively small population and limited domestic demand, especially when comparing to China. Yet similar to Dubai’s story in the Gulf States, Taiwan is strategically located in the center among the rapidly growing economies in Asia, and StarLux could theoretically duplicate Emirates’ success by transforming Taiwan into a connection hub for transcontinental flights.

While some skeptics have expressed doubt that Chang has the ability to purchase such large number of new and expensive aircraft in a short timeframe, the NT$17 billion (US$560 million) inheritance Chang and his mother reportedly received from his father, combines with the NT$10 billion (US$330 million) worth in shares in Evergreen Group that Chang holds, would give him close to US$1 billion in starting capital. Chang also said that some investors have agreed to come on board his ambitious project.

StarLux recently moved in to a six-floor, 160,000 square foot office space in Taipei as its corporate headquarters, and has started a hiring spree of essential airline administration and technical crews. Chang is reportedly considering procuring short to medium range airliners such as Airbus A321, A350, and Boeing 787, and also the long-range Airbus A350-1000 and Boeing 777X.