Taiwanese state-run banks will provide loans of TWD20 billion new dollars (USD670 million) with a maturity of two years to each of China Airlines (CI, Taipei Taoyuan) and EVA Air (BR, Taipei Taoyuan), but the carriers can only use the funds to cover operational expenses such as salaries, the Taipei Times reported.

Additional funds will be issued to their respective subsidiaries Mandarin Airlines (AE, Taichung Ching Chuan Kang) and Uni Air (B7, Taipei Sung Shan), while start-up carrier Starlux Airlines (JX, Taipei Taoyuan) will also be able to tap into financing, helping Taiwan's passenger airlines to ride out the current crisis, Minister of Transportation and Communications Lin Chia-lung said at a news conference.

Bank of Taiwan and other state-owned banks agreed to lend a total of TWD50 billion (USD1.67 billion) to the airlines, which would leave TWD10 billion (USD335 million) for the smaller carriers. The Small and Medium Enterprise Credit Guarantee Fund of Taiwan said in a statement that it would offer credit guarantees of 80%.

“We hope to receive a loan of TWD3 billion [USD100 million], which would help us pay employee salaries and office rent, as we, unlike our peers, have not cut staff nor asked them to take unpaid leave. So our personnel costs remain unchanged despite the pandemic,” Starlux spokesman Nieh Kuo-wei told the Taipei Times.

Taiwan's government has set strict rules on how the cash can be used, and the airlines agreed they would abide by them. The funds must cover operational expenses such as salaries, airport fees, fuel costs, and leasing payments. They cannot go towards repaying old debts.

Emboldened by the state support, StarLux has announced plans to recruit new pilots. Any pilots with Taiwanese citizenship and the required certificates have been encouraged to register via the company’s website, with applications accepted between June 1 and August 14 and interviews to take place beginning in September.