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Pilot school sued for $1 million by airline

By Cui Xiaohuo (China Daily)
Updated: 2009-11-18 07:53

A Beijing-based private aviation school was sued yesterday for more than 7 million yuan after violating a contract to train pilots from a State-owned airline.

At a court hearing at Xicheng district court, Beijing PanAm International Academy was ordered to return the 3.8 million yuan training fees and pay another 3.6 million yuan in penalties to China Postal Airlines, which claimed the school failed to graduate 10 of its pilots by October 2007.

However, the first private pilot school in China failed to show at the hearing yesterday. Neither the academy's representative nor its lawyer were present. The judge held the hearing and reviewed claims from the plaintiff's lawyers. The judge did not give any sentence at the end of the hearing, but required more information from the defendant.

When contacted by METRO yesterday, Li Weijian, president of the PanAm Academy, claimed his school was not hiding.

"Our school did hire a lawyer, but the lawyer was caught up in an urgent court hearing elsewhere and couldn't make it to today's hearing," he said.

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"We understand we will lose this case in terms of business contracts. We have nothing to defend," added Li. "I also understand that China Postal Airlines will sue us now because the legal effect of the contract will soon expire."

The academy has produced 280 graduates since opening in 2004 and had about 500 students at its peak. But it stopped operating in April this year after its majority owner, the bailed-out financial giant American International Group, was not able to inject an agreed $20 million by August 2008.

Hundreds of pilot students were dismissed from the school in a move that angered eight major airlines nationwide. They asked for multi-million yuan in compensation from the school.

The Civil Aviation Administration of China (CAAC) has held special meetings with the parties involved. Officials from the administration have reportedly said they hope the school will continue to train pilots for major State-owned airlines.

The failed school's board continues to operate in preparation for the arrival of the $20 million investment.

Wang Yi, the lawyer representing China Postal Airlines, told METRO he was not sure if his client would receive the full compensation.

But as long as the board continues to operate, they will be responsible for the compensation, explained the lawyer. Before stopping operation, PanAm was one of a small handful in China that has China Civil Aviation Regulation approval from the CAAC.