Financial losses ground United Eagle

Mounting losses have forced United Eagle Airlines, China's first registered private-owned airline company, to ground two of its aircraft, the Beijing Times reported Tuesday.

Junyao Group, the single largest shareholder of United Eagle, said those aircraft had been grounded since last Friday mainly because of cash flow problems. "The more aircraft we fly, the more debt we accrue," a company official of Junyao was quoted as saying.

According to the China Civil Airports Association, the airline currently owes 39.51 million yuan in airport charges as of March this year. The airline hasn't been paying airport fees since February 2007, the association said.

Li Haiying, chairman of United Eagle, was quoted by the newspaper as saying that currently only one of its aircraft was grounded and another one was in maintenance. He also added that financial problems have made it hard for the company to further develop its operations.

"But we are still taking necessary action to keep the airline afloat," Li said.