Great Wall Airlines, the joint venture cargo startup in which Singapore Airlines holds a 25% stake, suspended operations Friday after the US government imposed sanctions against its majority stakeholder for allegedly conspiring to supply Iran with missile components.The US Treasury Dept. last week froze all US-related assets of Great Wall Industry Corp., the Shanghai-based firm that owns 51% of Great Wall Airlines, saying it is one of four Chinese companies providing military support to Iran.

Great Wall Airlines, which only had been in operation for two months, said it is "in discussion" with the US government "with a view to bridging the impasse created by these sanctions." It operated two 747-400 freighters on lease from SIA Cargo for flights from Shanghai to Amsterdam and destinations in Asia. It said cargo booked on its aircraft has been moved to other airlines.

The Treasury Dept. said GWIC has provided "goods to Iran's missile program" and urged "governments worldwide...to take appropriate measures to ensure that their companies and financial institutions are not facilitating Iran's proliferation activities." The sanctions mean Boeing cannot have any dealings with Great Wall Airlines. GWIC said it has "never rendered assistance to any country for any weapon of mass destruction program" and called the US sanctions "simply unreasonable."

The Chinese government encouraged foreign airlines to invest in JV cargo carriers to tap into the country's rapidly expanding air cargo market. Lufthansa controls a 25% stake in Jade Cargo International, an airfreight startup viewed as a Great Wall rival that launched Aug. 5 and is 51% owned by Shenzhen Airlines (ATWOnline, June 8).