The General Administration of Civil Aviation of China has approved China Southern Airlines' plan to set up a joint-venture airline Chongqing Airlines with Chongqing Development & Investment Company.

The new airline will involve a total investment of RMB1.2 billion. China Southern will invest RMB720 million for a 60% stake, while Chongqing Development & Investment will take the remainder for RMB480 million.

The airline company will have a five-member board, which will consist of three members from China Southern, including a chairman and two from Chongqing Development & Investment. It will only fly domestic routes and use three A320 aircraft provided by China Southern.

Chongqing Development & Investment was set up by the Chongqing municipal government and has a registered capital of RMB100 million.