Zhongyuan Airlines, a regional airline in central China, is seeking foreign investment to double its fleet of five passenger aeroplanes in the next two or three years.
It aims to become the second Chinese carrier to sell a stake to foreign investors, following the sale of a 25 per cent stake in Hainan Airlines to United States investment funds controlled by financier George Soros.
'We are talking with several interested parties,' Xu Jianguo , president of Zhongyuan Airlines, said.
He declined to give more details.
Last November, American Aviation Investment, a fund partly controlled by Mr Soros, paid US$25 million for a 25 per cent stake in Hainan Airlines, marking the first time a Chinese airline had sold an interest to foreign investors.
Mr Xu said the Civil Aviation Administration of China (CAAC), the country's aviation regulator, still placed tight controls on foreign investment in Chinese airlines.
However, mainland sources said the CAAC had started to appear less stringent. In a soon-to-be-released five-year plan covering the period until 2000, the CAAC said it would 'actively' encourage regional airlines to set up joint ventures with foreign airlines and other foreign investors.