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China's first private airlines to suspend passenger flight service

(Xinhua)
Updated: 2008-12-04 16:02

SHANGHAI - Financial and management problems are forcing Okay Airways to suspend passenger flights from December 15 to January 15, announced the company's chairman of the board, Wang Junjin on Wednesday.

The civil aviation authority, has already approved Wang's application for suspension. He said Okay Airways' cargo business, which partners with Fedex, will not be affected.

The privately owned carrier operates 20-plus domestic passenger routes in Tianjin, Changsha, Hefei, Kunming, Harbin, Hangzhou, Haikou and Sanya.

Wang promised that the company would not lay off workers during the suspension.

The company's passenger flight business employs about 800 people, according to the company's spokeswoman, Han Jing.

She said the passenger sector accounted for 80 percent of the company's business.

"The business suspension may break the company's capital flow, and force the company into bankruptcy liquidation," she said.

Shanghai-based Junyao Group through the Beijing Transport Energy Share-holding Co. owns 63 percent of the airline.

Wang, who is also chairman of Junyao, said the board decided to replace Liu Jieyin as president of Okay Airways. He will be transferred to another post.

Wang did not say when this decision was made or where Liu will be moved to. His replacement has not yet been made.

However, Liu told Xinhua that the suspension decision was unilaterally made by the company's largest share holder of Junyao without consulting other share holders.

"The chairman said the management problem raised the flight safety concerns in his flight suspension application. However, the current problem is the lack of capital support from Junyao, which hampered the airline's business growth," said Liu.

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