Private aircraft ownership by China's wealthy elite has grown in recent years, but the military controls airspace and is reluctant to permit private flights.
A businessman surnamed Li crashed a helicopter into a reservoir when flying in the eastern province of Anhui last week, the Global Times reported.
Li -- the chief manager of a construction machinery company who paid over one million yuan (USD 160,000) for his chopper -- swam to safety but a 25-year-old male passenger was killed, it said.
"Every single wall inside the cabins has planes painted on it and 'flying club' is written at the bottom of the swimming pool," the newspaper quoted a witness as saying.
Private aircraft ownership in China is low compared with other large economies, with just a few hundred said to be registered.
But growing reports of "black flights", as the clandestine trips are known, reveal a wealthy elite paying for the privilege of zooming to work in a plane or helicopter.
Pilots flying illegally in China can be fined up to 100,000 yuan. The Global Times said Li's punishment has not been decided.
It cited local media as saying the airport was declared illegal and will be demolished "within a week".
