Based on the company's application, Beijing No. 2 Intermediate People's Court has unfrozen the CNY180 million settlement payment of Shenzhen Airlines and instead sealed five engines and a stimulator worth a total of CNY200 million as well tickets worth CNY5 million for asset preservation.
In June 2008, Shenzhen Airlines signed a supply contract with South China Bluesky Aviation Oil Company to receive oil from the latter. Later due to the airline's being in arrears by more than CNY180 million for oil, SCBAOC submitted an arbitration request to the court which led to the freezing of the airline's CNY180 million settlement payment.
Shenzhen Airlines later contacted with the court, saying that freezing the settlement payment had seriously affected the company's cash flow and operations, and applied for the court to exchange it for the assets listed above. Through the court's intervention, the two sides finally reached an agreement on the sealing of these assets.
With regard to the sealing of its assets, a representative from Shenzhen Airlines stated that because of the increase of international oil prices and the influence of the global financial crisis as well as a series of natural disasters in China, Shenzhen Airlines faces great difficulties, which resulted to the delayed payment to SCBAOC. The person added that it is a common occurrence in the Chinese domestic aviation industry for airline companies to default on payments to oil suppliers.
