Source: ATW Daily News Author: Katie Cantle 06/30/2008
Subject Concerned: Government Airlines Aviation Fuel
Struggling Wuhan-based East Star Airlines (ESA), which claimed it is in "financial crisis", last week was dealt a further blow by CAAC, which decided to suspend its right to fly to Guangzhou and Shenzhen from July 7.
This makes the second time ESA has faced such a sanction. Flights to Shanghai were suspended by the regulator last month owing to the airline's inability to submit its "air transport funds" to CAAC in time.
An ESA insider recently was quoted in Chinese media claiming the airline might cease operations this month because of its "financial burden".
It owed approximately 100 million yuan (US$14.6 million) to China Aviation Oil Import and Export Co., the main domestic oil supplier to Chinese carriers.
Following those reports, the oil company agreed to postpone ESA's payment by one month to June 28.
ESA spokesperson Pan Yanli admitted the airline faces "some severe difficulties", including financial problems and a talent shortage.
"We do suffer from financial strain but we are trying our best to solve it," she said, adding that "going listed in order to collect funds" is a possible solution.