TransAsia Airways Corp., the struggling Taiwanese airline that has suffered two deadly crashes since 2014, is closing down.
An emergency board meeting concluded that the island's No. 3 carrier should be shut down, company representatives said at a news conference on Tuesday, after the company failed to restore confidence in the wake of the fatal incidents.
All of the carrier's 84 flights on Tuesday were canceled, stranding around 5,000 passengers according to Taiwan's Civil Aeronautics Administration. TransAsia's shares on the Taipei exchange were suspended.
The Taipei-based airline said it was not able to repay convertible bonds due Nov. 29.
TransAsia had been profitable until it suffered two crashes in the space of seven months. In the first incident, in July 2014, 48 people died when a ATR-72 turboprop crashed on the island of Penghu when attempting to land in bad weather. In February 2015, another ATR-72 operated by the airline plunged into Taipei's Keelung River after clipping an elevated highway, with the loss of 43 lives.
A June 2016 report into the Taipei disaster attributed the crash to pilot error, finding that the pilot had cut power to the wrong engine after the plane's other engine developed mechanical problems on takeoff. In the days following the incident, TransAsia ordered all 68 of its pilots to retrain: 10 of them failed the first stage of the Civil Aeronautics Administration's qualification process.
These safety concerns led to TransAsia reporting a $ 36.3 million loss for 2015. Those losses widened to about $ 70 million for the first three quarters of 2016.
Compounding the damage done to TransAsia's reputation caused by the twin disasters has been a recent decline in cross-strait traffic triggered by the election of President Tsai Ing-wen, whose Democratic Progressive Party has angered Beijing in the past by advocating Taiwanese independence. Mainland visitor numbers fell by more than a quarter in the five months following Ms. Tsai's inauguration in May, according to the island's tourism authority. Fourteen of TransAsia's 27 destinations outside Taiwan were on the Chinese mainland.
However, a weak business plan damaged the airline as much as these other mishaps, said Will Horton, senior analyst at CAPA-Center for Aviation.
TransAsia's "strategy was shaky", Mr. Horton said, pointing to the launch of a low-cost carrier, V Air, in 2014, despite TransAsia's own lack of scale; and then the closure of V Air last month.
The island is also served by the significantly larger China Airlines and EVA Air. "Three premium, full-service carriers for Taiwan is too much," Mr. Horton said.
In a statement on Monday, after the airline had announced the cancellation of Tuesday's flights, Taiwan's government criticized the carrier for giving passengers such short notice.
It also said it would investigate possible insider trading of TransAsia's shares, noting a spike in trading activity in the hours before Monday's announcement prefiguring the airline's closure.
—Chester Yung contributed to this article.
Write to Trefor Moss at Trefor.Moss@wsj.com
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