China's first private airline, Okay Airways, suspended passenger service on Dec. 6, 10 days ahead of schedule as a result of financial and management problems, according to a spokesman of JuneYao Group, a major shareholder of Okay Airways.

Since planes could not be fuelled and passengers could not get normal boarding service, the company decided to suspend passenger service from Dec. 6.

The Group's spokesman told Xinhua that the decision to suspend passenger service in advance was made by Okay Airways' directorate on Dec. 6.

The main reason was that some Okay Airways' 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, Okay Airways had planned to suspend passenger service on Dec. 15. But some airports, concerned about the company's financial situation, would only refuel the carrier's planes for cash.

A staff at the Tianjin Binhai International Airport, a major hub for the carrier, told Xinhua that all Okay Airways' 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 Dec. 6 to other airlines or the Beijing Capital International Airport (BCIA).

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

The carrier started operation in March 2005. Shanghai-based JuneYao 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.

Okay Airways' cargo service was still running as usual.

Wang Junjin, Okay Airways' chairman of the board and also JuneYao Group's chairman, said the company would neither lay off workers nor stop paying them during the suspension period.

Management problem and lack of capital support from JuneYao Group had been explained by Okay Airways' managers as the factors in the suspension.

Wang also said Okay Airways 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 Okay Airways, China's fledgling private airlines include East Star 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.