Bankrupt airline's parent sues
Source: Xinhua |
May 10, 2011, Tuesday
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Print Edition
Print Edition
THE parent company of a bankrupt Chinese private airline sued the government's aviation agency yesterday for its allegedly improper grounding of the company's planes, which the firm said led to its bankruptcy amid the 2008 global financial crisis.
A court in Guangzhou heard the East Star Group case against the Civil Aviation Administration's Central and South Bureau. The group is the parent of East Star Airlines, which went bankrupt in August 2009 after a restructuring plan failed to keep the company afloat.
The case marks the first time a Chinese court has heard a suit in which a private airline has questioned the government's orders.
East Star Airlines was deep in debt after being battered by the financial crisis. It rejected a government-initiated takeover by the parent group of national flag carrier Air China on March 12, 2009, just three days before it was grounded by regional civil aviation authorities.
A court in Guangzhou heard the East Star Group case against the Civil Aviation Administration's Central and South Bureau. The group is the parent of East Star Airlines, which went bankrupt in August 2009 after a restructuring plan failed to keep the company afloat.
The case marks the first time a Chinese court has heard a suit in which a private airline has questioned the government's orders.
East Star Airlines was deep in debt after being battered by the financial crisis. It rejected a government-initiated takeover by the parent group of national flag carrier Air China on March 12, 2009, just three days before it was grounded by regional civil aviation authorities.
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