Any person desiring to establish a civil air transport enterprise shall request MOTC through the CAA for permission to establish its business. Within a specified preparatory period the applicant shall, according to law, complete registration with appropriate authorities, equip itself with aircraft, enable itself to engage in safe operation according to applicable laws and pass the review of Operations Specifications conducted by CAA, execute agreements for conditional or unconditional purchase of aircraft, and submit to MOTC through CAA for approval. If an applicant’s business scope includes international transport, the applicant shall register with the Customs Office to acquire appropriate certification. The civil air transport enterprise may begin its operation only after receiving permit and Air Operator Certificate from CAA.
The permit and Air Operator Certificate shall become invalid if the enterprise fails to start operations within 24 months from the date the permit and Air Operator Certificate was issued, or it has suspended operations over 6 months after starting its business. In this case, CAA shall report to MOTC to have the permit and Air Operator Certificate revoked and notify agencies concerned to cancel its registration, unless an extension justified by special circumstances is applied for and approved through due process.
Civil air transport enterprise shall, prior to the suspension or termination of its operation, submit the business suspension or termination plan to MOTC through CAA for approval pursuant to Article 63-1, and shall not suspend or terminate its business earlier than 60 days after the approval date.
Within 30 days from termination, a civil air transport enterprise should surrender the issued permit and Air Operator Certificate for cancellation. If it has not been surrendered within the 30-day period, CAA will issue a public notice advising that the permit and Air Operator Certificate has been revoked.
The extension stated in paragraph two shall not exceed a period of six months, and it can only be granted once.

A civil air transport enterprise shall be formed as a corporate organization adhering to the following rules:
1) Unlimited company with the entire body of its shareholders being citizens of the ROC.
2) Limited company with over 50 percent of capital owned by citizens or legal persons of the ROC and represented by directors who are citizens of the ROC.
3) Company formed by shareholders of both limited and unlimited liabilities, whose unlimited liability shareholders are citizens of the ROC.
4) Company limited by shares with over 50 percent of its total shares owned by citizens or legal persons of the ROC, whose chairman and over 50 percent of the directors are citizens of the ROC; provided that no single citizen or legal person of a foreign country may hold more than 25 percent of its total shares.
For a company limited by shares, all the shares issued should be registered by name.

Civil air transport enterprise with its paid-in capital of NT$ 2 billion or above shall have independent directors undertaking public welfare, and the number of such independent director shall be at least one.
The appointment of independent directors with public welfare shall be submitted to MOTC for record. MOTC may request the civil air transport enterprise to replace its independent director if necessary. Rules governing the qualification, requirement, duties and other relevant matters of such independent directors shall all be enacted by MOTC.

A civil air transport enterprise should have secured international air traffic rights with relevant slots and in possession of an air route certificate, before it can engage in international scheduled air transport service on assigned air routes. CAA shall establish an international airport slot coordination committee or commission a neutral entity to conduct the allocation of slots. CAA shall prescribe measures relative to the qualification, condition, obligation and supervision of the entity so commissioned.
Similarly, civil air transport enterprise should have acquired aircraft takeoff & landing allotment for domestic airports or slots and in possession of an air route certificate, prior to commencing domestic scheduled air transport service on designated air routes.
The points of departure, intermediate points and destinations along the designated air routes related to in the foregoing two paragraphs, nature of service and validation date are all specified in the air route certificate.
Guidelines for the screening of international air traffic rights allocation stated in paragraph one shall be formulated by MOTC.
CAA shall prescribe measures for regulating aircraft takeoff & landing allotment for domestic airports and time zone.

A civil air transport enterprise permit, Air Operator Certificate or air route certificate is not transferable, and the permit, Air Operator Certificate or certificate holder must not consider him- or herself as enjoying exclusive rights to operate the various services as prescribed in the permit or certificate thereof.

A civil air transport enterprise holding an air route certificate, or any aircraft stopping over in ROC territory shall be required to carry mail in accordance with the provisions of the ROC Postal Act.

Freight rates for airmail letters and air postal parcels shall be lower than those for ordinary air cargo.

A civil air transport enterprise shall give priority to transport airmail over that of passengers and cargo.

Civil air transport enterprise shall notify MOTC through CAA regarding its tariffs for passengers and cargo on international scheduled air routes. For those tariffs on domestic scheduled air routes, shall notify MOTC through CAA to approve the ceiling and bottom tariffs. The same procedure applies in the event of rate changes.
Rules governing the utilization of tariffs, preferential proposals, application procedures for approval, effective day and any other relevant matters shall all be formulated by MOTC.
As a favorable consideration to residents in remote offshore islands such as Penghu county, Kinmen county, Lienchiang county, Lanyu Township and Lyudao Township both in Taitung county, airfare subsidies shall be offered for travel by air to and from their residence or between offshore islands. Whereby, the airfare subsidies will be classified according to varied airport conditions as follows:
1) The subsidies of Magong Airport in Penghu county and Shangyi Airport in Kinmen county shall be 20 percent of airfare.
2) The subsidies of Nangan Airport and Beigan Airport in Lienchiang county shall be 30 percent of airfare.
3) The subsidies of both Cimei Airport and Wangan Airport in Penghu county , also Lanyu Airport and Lyudao Airport in Taitung county shall be 40 percent of airfare.
Aircrafts in use for the above purpose include fixed wing aeroplanes and helicopters.
Air carriers serving offshore islands with fixed wing aeroplanes and/or helicopters should be rewarded.
Measures of granting airfare subsidies as described in third paragraph and of reward in preceding paragraph shall be drafted by MOTC for ratification by the Executive Yuan (Cabinet).

A civil air transport enterprise shall submit periodical reports to MOTC for record through the CAA, pertaining to the following:
1) Business matters.
2) Financial matters.
3) Operations matters.
4) Maintenance matters.
5) Shareholders holding 3% or more of total shares.
Whenever deemed necessary, CAA may inspect the business and financial conditions and other relevant matters of the civil air transport enterprise.

CAA may provide personnel to inspect a civil air transport enterprise and monitor its operations including employees and equipment. The civil air transport enterprise shall not refuse, avoid or impede such inspections, and will be notified of deficiencies if any; and shall improve within a certain period of time when so advised by the CAA.

A civil air transport enterprise shall, in addition to action taken in compliance with law, make a report to MOTC for record through CAA regarding any of the following events:
1) Increase or decrease of capital.
2) Issuance of corporate bonds.
3) Contracts entered into between one civil air transport enterprise and another, or with any other related enterprise with regard to lease, joint transport and agency matters.
4) Change or relocation of principal operations and maintenance facilities.

Civil air transport enterprises shall report to CAA with a performance plan of alliance and submit related documentation to apply for approval and to file an application for MOTC approval for their alliance before starting the alliance operation. The MOTC is able to approve such alliance with conditions, period, limitations or burdens.
In the event that the civil air transport enterprises fail to operate an alliance in accordance with the performance plan, or the approved reasons for the alliance to cease to exist, or the alliance cause violation of public interest or civil aviation development, the CAA is entitled to withdraw its approval, revise the contents of approval, order to stop the alliance or amend the alliance actions.
The alliance shall be subject to the Fair Trade Commission’s approval if the alliance mentioned in the first paragraph meets the scope of alliance actions under Article 14 of the Fair Trade Law. The Reviewing Rules for Approving the Alliance shall be promulgated by MOTC together with the Fair Trade Commission.

To serve the needs of public interest, CAA may, with MOTC approval, instruct any civil air transport enterprise to adjust or increase designated air routes.

In the event of any urgent requirement by the government, a civil air transport enterprise shall accept the direction of MOTC to carry out designated transport assignments.

When a civil air transport enterprise is dissolved in accordance with the law, its permit, Air Operator Certificate and air route certificate shall simultaneously become invalid. The permit, Air Operator Certificate and air route certificate shall be returned to CAA for cancellation within 30 days.

If the permit, Air Operator Certificate or air route certificate of the civil air transport enterprise has an expiration date shall not continue operation when it has been expired unless an extension is applied for and is approved in accordance with the laws.

(Deleted)

Rules governing the business items of civil air transport enterprise, limitation of eligibility, application for permission to set up business, application for a permit, registration, cancellation and renewal, amount of capital, change in company registration, procurement of aircraft, conditional purchase and sale, lease of aircraft, limitation of aircraft age, air routes preparation, suspension or termination, suspension or termination of business operation, application for launching a flight, approval for alliance, collection of certificate fees and charter application fees, business management, as well as air routes preparation of foreign civil air transport enterprise, establishment of branch office, setting up a general sales agent, collection of certificate fees and charter application fees, management of operations and other matters to be observed shall all be enacted by MOTC.