NEWSFLASH

EVA AIR SHUTS DOWN MANILA OPERATIONS

Manila, June 21, 2000 - Eva Air, one of two Taiwanese carriers servicing the Philippines, announced yesterday the closure of its Manila offices following almost a three-month suspension of its flights by the Civil Aeronautics Board (CAB).

Officials of Taiwan's Civil Aviation Administration said the issue has become "a personal one" as they complained that the CAB's decision to suspend flights of Eva Air and China Airlines was done arbitrarily.

In July 1999, the Philippine government scrapped a 1996 air services agreement with Taiwan, accusing Eva Air and China Airlines of exceeding passenger capacities and poaching on US-bound passengers to the detriment of PAL.

Eva Air and China Airlines flights serving the Manila-Taipei route were eventually canceled mid-February after the CAB confirmed the alleged violations of the two Taiwanese carriers.

Under an interim agreement reached last January, the Taiwanese carriers were given a 4,800-passenger capacity a week.

As interpreted by the Philippines, the agreement provides that carriers can carry a maximum of only 4,800 passengers weekly in the Manila, Taipei and Kaohsiung routes.

According to Taiwan's interpretation, however, the limit only applies to the Manila-Taipei-Manila route.

Taiwan had earlier sought the restoration of the 1996 air agreement, and demanded that Eva Air and China Airlines be allowed to fly passengers from Manila to any of the foreign destinations of the two carriers.