Okay Airways' Cargo Operations Partnership With FedEx Will Continue

A planned one-month suspension of passenger service by China's Okay Airways began Saturday, 10 days earlier than previously announced.

Embroiled in managerial and financial disputes with a controlling shareholder, the Shanghai-based Junyao Group, Okay had slated the suspension to start on December 15.

Xinhua News Agency reports that China's Civil Aviation Administration suspended Okay's flights on Saturday at Junyao's request, a move taken when airports that refuel the airline's planes began demanding cash for payment.

Over 2,000 passengers became stranded at the surprise shutdown of service, and had to be booked on other flights.

China's first private domestic carrier, Okay was started in 2005. With a fleet of 11 airplanes, mostly Boeing 737s, Okay regularly operates more than 20 routes and partners with Fedex on cargo operations.

Although Okay and Junyao reached an agreement in 2006 to share personnel, routes, marketing and managerial expertise, it has been an uneasy alliance, punctuated with disputes regarding how the airline should be run, the Associated Press said.

Wang Junjin, chairman of both Junyao and Okay, has been named as Okay's president, replacing Liu Jieyin. Xinhua reports that Wang had promised not to cut jobs or reduce salaries during the one-month flight suspension.

Okay flights were planned to resume in mid-January, in time for the peak travel period associated with the Chinese New Year, but it is unclear what effect the early cessation of service and ongoing difficulties between Junyao and Okay will bring.

FMI: www.okair.net