China National Aviation Holdings, parent of the country’s flag carrier Air China Ltd, plans to set up a branch in Wuhan, the city where East Star Airlines is based, and to acquire assets from the local carrier.
China Knowledge said the Wuhan branch is expected to facilitate CNAH’s acquisition of East Star, which is on the verge of bankruptcy. This is a bit of an ongoing saga and the opera is not over until the fat lady sings. But it is probable.
A senior official with the local aviation authorities was quoted as saying that Air China has applied for approval to set up the Wuhan branch and may start operation as soon as May. The branch may also take over some resources of East Star, including routes and over 1,000 employees.
Privately-owned East Star Airlines has suspended flights from March 16 due to its unpaid debts and management problems.