Wuhan-based private airline East Star Airlines has officially become bankrupt after its restructuring application was rejected by the city’s Intermediate People’s Court, reported a Hubei government website.

The Beijing-based investment company ChinaEquity had promised to invest up to Rmb300m in the restructuring plan but it did not specify the source of the funding and failed to provide relevant documentation, the court said.

East Star was founded in May 2005, making it China’s fourth private carrier after Okay Airways, United Eagle Airlines and Spring Airlines. It operated more than 20 domestic passenger routes with a fleet of nine aircraft and held about 10 per cent of the market share in Wuhan.

On 13 March, the airline rejected a government-initiated takeover by the parent group of Air China. Two days later, its operations were suspended by the General Administration of Civil Aviation of China, due to prolonged financial and management problems.