MA60. Courtesy, AVIC

Tianjin-based Okay Airways (OKA) has applied to the Civil Aviation Administration of China (CAAC) to launch a regional airline and plans to place a firm order for 20 AVIC-produced MA60 turboprops, according to OKA EVP Liu Jieyin.

If approved, Liu said the new airline will have a new strategic investor. Local industry analysts said approval remains uncertain since CAAC has raised the standard for new domestic carriers.

The MA60 is valued at CNY90 million ($14.2 million) at list prices, much cheaper than its foreign counterparts. OKA operates a fleet of 15 aircraft comprising nine Boeing 737-800s, one -300F and five MA60s.

The carrier has 10 MA60s on order (ATW Daily News, Aug. 2, 2011) and is scheduled to take delivery of two of the type in June and August, according to Liu, who said the carrier plans to introduce 100 more MA60s over the next 15 years.

High operating costs and lack of favorable policies support have made it difficult for China’s two domestic regional carriers, Guiyang-based Chinese Express Airlines and Xi’an-based Joy Air, to be profitable.

CAAC has assigned a CNY2 billion subsidy through 2015 to develop and grow domestic regional carriers but industry analysts say it is not enough for domestic regional carriers to make a turnaround and compete with traditional carriers on trunk routes.