Earlier this month, a local court in Sichuan Province heard evidence in a combined suing and countersuing between an airline and one of its pilots, a case that has been seen as indicative of problems involved in state-trained pilots leaving for jobs with new private air companies.

The court in Shuangliu County, near Chengdu, capital of the southwestern province, said on July 6 that it would announce its ruling on an unspecified future date because the case was complicated and the first of its kind in the country.

The current legal action began in March, when Southwestern Airlines, a branch of Air China and one of the biggest state-owned airlines in the country, brought a lawsuit against Li Jianguo demanding 8 million yuan (US$967,000) compensation for leaving his post.

Since the opening up of private investment in civil aviation, dozens of experienced pilots from state-owned airlines have resigned for better paid jobs in private airlines.

Li Jianguo signed a contract with Southwestern in November 1996 after retiring from the Air Force. Last October 14, Li proffered his resignation and, unable to negotiate a new deal with the airline, left his post at the end of the month. 

To block his departure, Southwestern demanded more than 8 million yuan (US$967,000) compensation. Sun, an information official from the company, said this included 478,300 yuan (US$58,000) to pay them back for his training and other expenditure, as well as compensation for breaking his contract.

Li countered with a demand for 60,000 yuan (US$7,200) in allowances and 110,000 yuan (US$13,300) housing subsidy that he said he was still owed, as well as return of his documentation.

On February 28, Southwestern took the dispute to the local labor administration agency for arbitration. They ruled that Li should pay 3.38 million yuan (US$407,000) to the company, but neither the airline nor Li accepted this.

On March 9, the airline filed their case with the local court, and Li did the same two days later.

Zhu Xuejun, Li's lawyer, said his contract was unfair because its compensation terms violate State Labor Law. He said compensation from employees for breaking a contract should be no more than 12 months' wages.

According to Zhu, Li received total wages of 600,000 yuan (US$72,000) in the years that he worked for Southwestern. 

Sun said Li should have understood the contract when he signed it, and that pilots moving to private firms should cover state-funded training to prevent loss of "state-owned assets."

Another two Southwestern pilots who have handed in their resignations face similar claims for compensation.

Since July, the General Administration of Civil Aviation of China (CAAC) has approved five private airlines.

(China.org.cn by Wang Zhiyong, July 20, 2005)