SHANGHAI - A Chinese airline company has been severely punished after one of its pilots refused to give way to a Qatar Airways' jet requesting a priority landing due to fuel shortage in Shanghai in early August, China's civil aviation authority said on Monday.

A Juneyao Airlines' plane in Shanghai Pudong International Airport on April 8, 2010.?[Photo/CFP]

Juneyao Airlines, a Shanghai-based carrier, was temporarily banned from expanding its business, setting up subsidiaries and buying or leasing new aircraft.

The privately owned airline was also required to cut 10 percent of its current flight capacity for three months, according to a statement from the Civil Aviation Administration of China (CAAC).

On Aug 13, a Qatar Airways' Boeing 777 flight from Doha to Shanghai Pudong International Airport was diverted to Hongqiao Airport for landing due to a thunderstorm.

As its fuel ran low while it circled over Hongqiao airport, the Qatar Airways flight called Mayday, a distress signal, and asked for a priority landing.

However, the Juneyao flight HO 1112 refused to give way after the control tower gave six orders in seven minutes, forcing air traffic controllers to arrange another emergency landing plan for the plane in danger. Both flights eventually landed safely.

In the statement, the CAAC criticized Juneyao Airlines' flight crew for seriously violating flight rules and breaching pilots' professional ethics.

The captain of the Juneyao Airlines' flight, a Korean pilot, had his license revoked. He was also banned from applying for a new license in China.

In addition, the flight's co-pilot had his license suspended for six months.

The statement said investigations found that the Juneyao Airlines' flight crew had inaccurately reported its remaining fuel, which it gave as the reason it did not follow the control tower's orders.

"Falsely reporting remaining fuel in order to land first at the risk of aviation safety is intolerable," said Tian Baohua, a member of an advisory group to the Ministry of Transport.

"In the skyways, the air traffic controller is like the policeman on the roads. Those who refuse to follow orders should be penalized."

According to the CAAC statement, the Qatar flight did not violate any regulations in the case but it too failed to report its remaining fuel accurately.

The flight had reported its fuel was five minutes away from the emergency level, while the investigation found it was 18 minutes away.

However, Tian said after a long-haul flight, the pilots of the Boeing 777 could only make conservative estimates about the remaining fuel because oil indicators are not always reliable.

The Chinese civil aviation authority said it will communicate with its counterpart in Qatar on the matter and also inform international civil aviation organizations.

Tian said the incident has served as a warning to Chinese carriers to take crews' quality into account when hiring foreign pilots.

China's civil aviation industry has been short of pilots due to its rapid expansion.

Many domestic carriers have been forced to recruit pilots from abroad.

"But domestic airlines should never lower standards to hire foreign staff," Tian warned.

After the accident, the CAAC decided to suspend Juneyao Airlines from recruiting foreign pilots.

The airline responded on Tuesday by saying that the flight crew was wrong for not following the controllers' commands, and the company apologized for the incident.