Hainan Airlines is in crisis following the appeal of six pilots to the Haikou Arbitration Committee to have their labor contracts terminated. The six resigned at the end of last year, bringing to 20 the number of HNA pilots who have walked out since 2006.

The carrier has accepted none of the resignations and their disputes remain unresolved. Luo Zulin, one of the six who asked for arbitration on Mar. 2, said the resignations were a result of "frequent overtime" and "long delays in getting their salary."

HNA is insisting on the validity the contracts and denied Luo's accusation regarding pay. It said that if the committee ruled in the pilots' favor, it would request several million yuan in compensation from them and the return of their licenses.

Airlines including Air China, China Eastern Airlines and Xiamen Airlines also have faced labor disputes with resigned pilots, largely because Chinese carriers traditionally cover training expenses that can amount to millions of yuan per pilot. There is considerable reluctance to allow them to transfer to competing carriers.

Under a Pilots Flow Management Proposal policy implemented by CAAC in 2005, "the potential new employer" of these resigned pilots must attain the permission of the "old employer" before hiring, then pay compensation of 700,000 yuan - 2.1 million yuan (US$98,300 - US$294,800). According to CAAC statistics, China's commercial aviation fleet numbered 1,099 aircraft last Sep. 30 and is expected to rise to 1,250 by 2010, leading to an estimated shortfall of 200 pilots annually.

In order to make up the severe shortage, carriers are beginning to follow the internationally common practice of recruiting privately trained pilots. China Southern Airlines started the trend last May, announcing its plans to recruit 100 such pilots. Sichuan Airlines followed three months later, hiring 50 private pilots. Spring Airlines, East Star Airlines and United Eagle Airlines have disclosed their interest in recruiting such pilots.