Analysis | China Southern graft probe puts booming mainland airline industry on edge

Uncertainty has gripped the mainland’s booming aviation industry in the wake of a corruption probe involving executives at China Southern Airlines, the country’s largest carrier, with questions raised over whether it is the start of a wider crackdown or an isolated case.

China Southern’s executive vice-president Chen Gang and chief operating officer Tian Xiaodong were under investigation for suspected “job-related crimes” and had been dismissed from their posts, the airline said in a stock exchange notice posted after the market close on Tuesday. and declined to give further information. 

A source at the Guangzhou-based airline – China’s largest by fleet size and passenger volume – told the South China Morning Post that  an internal circular said the two men duo  had already been detained on corruption-related charges, although the amount involved was not disclosed. “This is our highest-ranking executives in years to fall,” the source said.

China Southern was the only airline among a total of 13 state-owned enterprises and organisations to have just undergone a month-long on-site inspection during December since the end of November by the Central Commission for Discipline Inspection. in their third and most intense round of inspection in 2014.

“The taking down of these two of course has everyone nervous on the nerves and sends a warning signal, but we don’t know if other airlines or government officials will get into trouble,” the airline source said.

Beijing-based China Times said that  at least three more China Southern executives, including Hu Zhiqun, deputy director of party affairs and the head of its subsidiary CS Air Holding Construction and Development, Hu Zhiqun were also involved. A spokesman for  China Southern declined to comment.