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Business Deals

Taiwan's budding airline Starlux signs deal for 17 Airbus jets

The startup seeks to rival full-service carriers EVA and China Airlines

Founder Chang Kuo-wei aims to have StarLux Airlines compete directly with Taiwan's major commercial carriers.   © Reuters

TAIPEI -- StarLux, a newly established Taiwanese airline, will buy 17 cutting-edge A350 passenger jets from Airbus, hurrying to compete against rival commercial carriers at home with routes to greater Asia and North America.

The Taiwanese and European companies announced the deal Monday at the Farnborough International Airshow in the U.K. Five A350-900s are to be delivered starting in 2021, and 12 A350-1000s from the next year, StarLux said. The total price is likely to reach $6 billion, various media reported.

The fledgling airline, formed just in May, is expected to cover the cost through bank loans and other means. But for a company with no earnings to show, raising funds on that scale may prove difficult.

StarLux's founder and chairman, Chang Kuo-wei, is the fourth son of the founder of Taiwanese transportation conglomerate Evergreen Group, and was vice president of the group and chairman of member EVA Airways until 2016. After his father died that year, Chang lost out to his older brother in the ensuing succession struggle and was ousted from the group.

Chang went off on his own to found StarLux, envisioning it as a Taiwanese answer to Dubai-based Emirates. The dramatic chain of events has drawn in attention in Taiwan, with some calling it a tale of a prince's revenge.

Before Monday's deal, Starlux had already announced plans to lease 10 smaller A321 jets from Airbus, with plans to make its first flights in early 2020.

But it aims to be a full-service carrier, seeking to compete with EVA and fellow Taiwan-based carrier China Airlines rather than the budget airlines that have taken off in recent years. EVA and China Airlines currently hold an effective duopoly on major international routes to and from the island. StarLux considers cultivating growing demand from Asian passengers a pillar of its strategy, and intends to quickly develop North America-bound routes as well.

StarLux still faces the issue of securing enough takeoffs and landings slots for international routes from bodies including the Ministry of Transportation and Communications, among other hurdles. With China Airlines and EVA themselves working to expand overseas routes, the skies ahead will be crowded and bumpy.

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