The Civil Aeronautics Administration (CAA) under the Ministry of Transportation of Communications ordered the debt-ridden Far Eastern Air Transport (FAT)(Taipei) to fly over 2,000 passengers that would otherwise be stranded overseas back to Taiwan before suspending all its operations. The CAA issued the order during a coordinated meeting with FAT and other airlines after FAT announced it would shut down its operations starting today. Debt-ridden FAT filed for bankruptcy protection with the Taipei District Court February 17, and has sought new investors or injections of capital from its major stock holders since then. On May 1, the labor union of the financially-troubled carrier claimed they would cease offering labor service if its management fails to clear overdue salaries payable to them before May 15.
Due to the ever-rising fuel prices and Taiwan High Speed Rail's inauguration, the airline suffered financial losses since early 2007 and the situation was seriously worsened by poor financial management and risky investments. On 13 February 2008 FAT failed to pay the USD 848,000 it owed to the International Clearing House, a financial subsidiary of IATA, and IATA cancelled the airline's membership as a result. Although a local court granted FAT's restructuring application on 23 February 2008, in the next three months it still failed to obtain the necessary funds and the company's bankruptcy protection expired on 22 May. FEAT had stopped paying employee salaries but the staff were still on duty as of May 2008 because they wanted to try and save the company but some were saying they could not hold on much longer.
