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China's aviation regulator said it plans to grant a domestic operating license to Chongqing Airlines, a joint venture between China Southern Airlines and Chongqing Development & Investment Co Ltd.

The regulator said in a statement that total investment in the venture is 1.2 billion yuan, with China Southern investing 720 million yuan for a 60 percent stake.

Chongqing Development & Investment, a firm owned by the Chongqing municipal government will hold the remaining stake for 480 million yuan.

Chongqing Airlines will use three A320 aircraft provided by China Southern for domestic air passenger and cargo operations, the regulator said.

(US$1 = 7.62 yuan)