Shenzhen Airlines’ assets frozen due to fuel costs

With payment of 180 million yuan in fuel costs in default, Shenzhen Airlines Co., Ltd. has applied to liquidate its assets.
Reporters learned that, out of consideration for the special nature of the aviation industry, the city’s court has lifted the freeze of more than 180 million yuan of the airline’s cash-in-hand. Instead, the court has put a hold on the airline’s five engines, which are worth a total of 200 million yuan, a simulator, and five million yuan as collateral. Last June, South China Blue Sky Aviation Oil Limited entered into a contract to supply aviation fuel to Shenzhen Airlines. After the airlines posted more than 180 million yuan in debt due to fuel costs, Blue Sky suffered a shortage of operating capital and appealed to the Arbitration Commission in Beijing for adjudication, using the arbitration clause in their contract.