China National Aviation Holding, the parent of Air China, is still seeking to buy East Star Airlines despite an earlier rejection and the private carrier's forced suspension of services by local authorities at the weekend. 'This is the right time for [China National Aviation] to expand in the central region through acquisitions amid the downturn,' said Huang Bin, a spokesman for Air China. Air China has three mainland bases, Beijing, Shanghai and Chengdu, and the addition of Wuhan-based East Star would help expand the carrier's network to central China. The market has speculated that East Star could be injected into Air China once the deal is closed. On Friday, East Star chairman Lan Shili rejected China National Aviation's approach after disagreeing on terms. That came after Kong Dong, the chairman of Air China and China National Aviation, said last week the deal would close this month. East Star was grounded by Wuhan municipal government, after GE Aviation Services filed legal action against the airline for failing to pay aircraft leasing fees. The ban was approved by the Civil Aviation Administration of China on Sunday. Mr Lan was called in by the local government for questioning, mainland media reported yesterday. Mr Lan had wanted 600 million yuan (HK$680.34 million) for the sale of his airline, but the buyer only offered 160 million yuan in valuation, the Nanfang Daily, a Guangzhou-based newspaper, said. Given the suspension, any transaction fee could drop as low as 1 yuan, given the airline's 500 million yuan debt, the Shanghai Securities Journal said yesterday, citing sources. The Wuhan government and China National Aviation signed a letter of intent on March 11 to develop Wuhan into an international aviation hub by connecting it with Paris, Tokyo, Singapore by next year and Los Angeles, London and Berlin by 2015. 'It was East Star that approached the parent in the first place and the talks were held under general commercial rules,' Mr Huang said, who rejected rumours the company was involved in East Star's suspension.