China’s private airline suspends passenger serviceDecember 4th, 2008 - 6:19 pm ICT by IANS
Shanghai, Dec 4 (Xinhua) China’s first private airline OK Air has suspended passenger flight because of financial and management problems.Chief of the airline Wang Junjin said Wednesday the suspension from Dec 15 to Jan 15 would not affect movement of cargo business.
The company’s spokesperson Han Jing said the passenger sector accounted for 80 percent of its business.
“The business suspension may break the company’s capital flow, and force the company into bankruptcy liquidation,” she said.
OK Air became China’s first private carrier in 2005. It has a fleet of five Boeing 737 passenger jets, three Boeing 737 cargo planes, one China-made Xinzhou 60 and two Yun-8 cargo planes.
The private carrier sent a market signal for an expansion in February last year, when it signed a framework purchase agreement with China No. 1 Aviation Industrial Group for 30 Xinzhou 60 aircraft. The company declined to say how the current problem would affect the order.
OK Air had projected the 2008 passenger handling volume at 1.2 million at the beginning of this year. However, its volume in the first nine month reached only 710,000.
Besides OK Air, China’s fledgling private airlines include Juneyao, East Star, Air Spring and EU Air.
The companies engaged in talks this year to cope with the market slowdown, but there was no agreements reached.