China's biggest private airlines will invest 255 million yuan (US$32.6 million) to hold 51 percent of the Beijing-based new carrier, which has a registered capital base of 500 million yuan.

Mesa Air Group and Wilmington Trust Corp will pay the US dollars equivalent to 245 million yuan to take the rest of the stake, the airline said through its public relations agency.

The new venture will begin operation at the end of next year with 20 airplanes which are mostly 50- to 90-seaters.

It will add 20 more regional aircraft annually to have a maximum of 160 to 200 aircraft, the airlines said yesterday.

China's fast expanding air traveling demand has attracted carriers to tap the growing demand from small- and medium-sized cities.

Soros stake

Hainan Airlines, China's fourth biggest carrier in which financial tycoon George Soros has a stake, announced last week it had applied for a license for its subsidiary Grand Xinhua Express Airlines, a regional passenger and cargo carrier.

Grand Xinhua, which is based in China's northern city of Tianjin, is 81 percent owned by HNA Group, Hainan's parent, and 19 percent owned by Hainan.

It will lease five Don328s from Hainan when it starts flying early next year.

Hainan Airlines now has 29 regional aircraft, accounting for 42 percent of the nation's total.

HNA Group plans to invest 10 billion yuan in the coming three to five years to build its regional hub in Tianjin with 50 to 100 regional jets.

Hainan has ordered 100 regional aircraft from Brazil's Empresa Brasileira de Aeronautica SA for US$2.7 billion, including 50 50-seat ERJ145s and 50 106-seat Embraer 190s.

Meanwhile, Tianjian-based Okay Airways, China's first private carrier, signed a deal for 30 Xinzhou-60 jets earlier this year to develop its regional routes.

China Eastern Airlines Group said it also planned to build regional networks with Hubei Province's Wuhan as its hub.

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