China's first private airline, OK Air, suspended passenger service on Saturday, 10 days ahead of schedule as a result of financial and management problems, according to a spokesman of Junyao Group, a major shareholder of OK Air.

Since planes could not be fuelled and passengers could not get normal boarding service, the company decided to suspend passenger service from Saturday.

The Group's spokesman told Xinhua that the decision to suspend passenger service in advance was made by OK Air's directorate on Saturday.

The main reason was that some OK Air flights were delayed for the fuelling problem and that its own aviation safety could not be fully ensured, said the spokesman.

With the approval of the civil aviation authority, OK Air had planned to suspend passenger service on December 15. But some airports, concerned about the company's financial situation, would only refuel the carrier's planes for cash.

A staffer at the Tianjin Binhai International Airport, a major hub for the carrier, told Xinhua that all OK Air's 12 passenger routes from the airport had been suspended.

More than 700 passengers who were affected by the suspension at the Tianjin airport were transferred on Saturday to other airlines or the Beijing Capital International Airport.

OK Air sources said more than 2,000 passengers were stranded at airports across the country. The company's 300-plus passenger service staffs were making transfer arrangements for them.

The carrier started operation in March 2005. Shanghai-based Junyao Group, through the Beijing Transport Energy Shareholding Co., owns 63 percent of the airline.

The company has 11 planes and about 800 employees. It ran 20-plus domestic passenger routes serving the cities of Tianjin, Changsha, Hefei, Kunming, Harbin, Hangzhou, Haikou and Sanya.

OK Air's cargo service was still running as usual.

Wang Junjin, OK Air's chairman of the board and also Junyao's chairman, said the company would neither lay off workers nor stop paying them during during the suspension.

Management problem and lack of capital support from Junyao had been explained by OK Air managers as the factors in the suspension.

Wang also said OK Air had a growth of losses in daily operations.

The chairman said "the company will use the suspension period for internal adjustments, which will hopefully help make a fresh start for the beginning of next year."

He said the company planned to resume flights before the upcoming Spring Festival in January as that is a popular time for travel in the country.

Besides OK Air, China's fledgling private airlines include EastStart Airlines, Spring Airlines and United Eagle Airlines. Some of them were also facing financial difficulties.

Zhang Lei, a spokesman for Spring Airlines, said the company also suffered losses since the third quarter this year due to the increase of costs and decrease of the number of passengers.

Zhang said the company also expected losses in the fourth quarter.

(Xinhua News Agency December 7, 2008)