Agence France-Presse . Beijing

China Eastern, the nation's third-largest carrier, has won official approval to establish a regional airline with a major Chinese aircraft maker, state media reported Tuesday.

China Eastern will invest 400 million yuan ($55.8m) and take 40 per cent in the new company, which will be named Happy Airlines and target west China's middle- and low-end tourist market, the Beijing News said.

The state-owned China Aviation Industry Corporation I, a traditional military aircraft maker and the manufacturer of China's first home-made passenger airliner ARJ-21, will take the rest, it said.

The new airline will be based in Xi'an Xianyang International Airport in the country's northwest and expects to hire transport plane pilots from the air force, it said.

There are a handful of Chinese air companies running regional airlines, whose services are in huge demand but suffer from low profitability, according to the newspaper.
 

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