Theatre may not be its core business, but the airline industry has certainly been producing one drama after another in recent months. Two fleets grounded, debts piling up, passenger numbers down, a State-funded takeover the list goes on. So, what has happened to China's private airlines?

It is not a question easily answered, with some blaming an "unfair market", others the global slowdown. But no matter the cause, many now fear the crisis hitting the sector can only be solved with a massive overhaul of the industry - or it may soon start hitting passengers in the pocket.

The latest drama to take center stage has been the grounding of East Star Airlines, a small private carrier based in Wuhan, the capital of Hubei province. With a fleet of 10 aircraft running almost 30 flights a day, it was ordered to cease services by the Civil Aviation Administration of China (CAAC) on March 15, the same day its president, Lan Shili, was seized by police at Zhuhai Airport as he boarded an international flight, reported Caijing.com.

Tan Shizhang, a spokesman for Wuhan's communications committee, said it had demanded the cessation order because the firm was debt-ridden, thereby jeopardizing transport safety. However, an East Star source told Guangzhou Daily it was more to do with Lan's refusal to allow his firm - which accounts for 10 percent of the local market share - to be acquired by China National Aviation, the parent company of Air China.

The two had been in negotiations for some time before 43-year-old Lan, who is believed to have Singaporean citizenship, suddenly released a statement on the company's website on March 13 rejecting the deal. China National Aviation had already injected 50 million yuan (US$7.3 million) to prop up the struggling firm.

East Star now faces bankruptcy, with the Intermediate People's Court in Wuhan recently announcing it had accepted a lawsuit filed by six creditors, including General Electric's aircraft leasing arm GE Commercial Aviation Services, and frozen the airline's 16 accounts.

The incident came three months after the Tianjin-based Okay Airways was grounded for around 30 days, this time over an internal dispute between its controlling shareholder and management team, and just three days before the debt-ridden United Eagle Airlines, based in Sichuan province, received 200 million yuan from Sichuan Airlines, making them the first private airline to be taken over by a State-owned rival.

And for similar carriers, the outlook is far from rosy, analysts have said, despite CAAC director Li Jiaxiang saying this week Chinese airlines made an estimated 800-million-yuan profit in the first quarter thanks to a rebound in domestic travel and the government's supporting measures.

Figures for Spring Airlines show the Shanghai company made more than 20 million yuan last year, 70 percent less than in 2007, while the Nanfang Weekly in Guangzhou reported the profit was partly because of a payment from a CAAC fund set up to support civil aviation infrastructure construction.