China Aviation Industry Corp (AVIC I) is seeking investors to set up a regional budget airline using planes made and airports owned by the state-run company. The new airline could help lift the profile and attract customers for aircraft such as the Xinzhou 60, which has faced some resistance in the mainland because of its small size. 'We make aircraft and want them to fly,' said Yuen Liben, an adviser to AVIC I. 'We want to fly more Xinzhou 60s domestically to give people a chance to experience it.' The aircraft maker was also eyeing a takeover of a North American airline as part of a strategy of expanding the presence of the mainland's aviation industry, the Shanghai Securities Journal reported yesterday. Mr Yuen said the 60-seat turboprop Xinzhou 60 was well received in overseas markets but given the cold shoulder by mainland carriers. The weak safety record of the Yun 7, a predecessor to the Xinzhou 60, was also an obstacle to sales of the aircraft. The fact that many mainlanders were reluctant to fly in smaller regional planes also did not help. 'Chinese will claim a plane is too small even when they are flying in a Boeing 737,' Mr Yuen said. 'Many people have the idea that the larger the airplane, the safer the trip.' The mainland also lacks regional airlines, leaving smaller planes with a limited market. Okay Airways, the mainland's first private-sector airline, sealed a deal for 10 Xinzhou 60s on Wednesday. As well as boosting domestic demand for its aircraft, setting up the airline would allow AVIC I to make better use of its assets, including airports. The aircraft maker has airports in Chengdu, Guizhou, Shengyang and Shanghai which are used for trial flights. AVIC I had already consulted the General Administration of Civil Aviation of China about setting up the airline and preparation work could be done this year, the Shanghai Securities Journal quoted AVIC I general manager Lin Zuoming as saying. Mr Lin expressed interest in buying some Airbus factories in Europe that the aircraft maker wants to dispose of as part of its restructuring plan. Apart from deploying the Xinzhou 60, the new carrier would use other small aircraft using leasing finance, said Mr Yuan. Target destinations would be tourist spots and remote cities in central or northwestern China. With its relatively cheap cost structure, AVIC I's new airline would be in a position to exploit demand as a budget carrier, Mr Yuen said. Some 11 firm orders for the Xinzhou 60 and as well as memorandums of understanding were signed with several African airlines in 2005.