By XUE Bingbing

Joy Air Holding (JAH), a subsidiary of state-owned aircraft manufacturer the Aviation Industry Corporation of China (AVIC), applied for bankruptcy on July 25. JAH has been listed as a defaulter on multiple occasions, and its equity holdings have been frozen. 

Joy Air, a passenger airline founded by AVIC and China Eastern Airlines in 2008, was initially intended as a vehicle to showcase AVIC products, and commenced passenger services began the next year. But business didn’t turn up, and China Eastern Airlines, due to its own financial struggles, gradually sold its stake in Joy Air to AVIC, and completely divested in 2016.

AVIC founded JAH in 2012 to shift its direct ownership of Joy Air to indirect ownership. Fully owned by AVIC, JAH was positioned as the main platform for AVIC’s aviation operations. JAH was the only company at the time qualified as a passenger airline and aircraft manufacturer.

By 2014, AVIC had lost interest in Joy Air. China Eastern withdrew in 2016. Joy Air was then wholly-owned by JAH and Okay Airways was brought on board to manage operations. In April 2020, even JAH gave up on the passenger airline business and sold its stake. 

Since 2012, JAH has invested in 16 ventures, withdrawn from five of them (including Joy Air) and another five have ceased to exist. Only three are operating normally. 

JAH was listed as a judgment debtor over a 95-million-yuan (US$13 million) loan dispute. Furthermore, equity held by JAH in four companies has been frozen until 2024.