A-Sonic said in a statement the joint venture hopes to ride on a projected boom in air travel in the world's most populous nation.

The partnership will be between A-Sonic's wholly-owned subsidiary JANCO International Pte. Ltd. and the Chinese firms Guangdong China Travel Service (Holdings) Ltd. and China Xpress Pte. Ltd.

The three companies have agreed to jointly file an application with Chinese aviation regulators for an air operator's licence.

"After obtaining all the requisite approvals, the parties will jointly establish a foreign joint venture company to own and operate the airline," A-Sonic said in a statement.

The carrier is to be based in Guangdong's capital, Guangzhou.

State-owned Guangdong China Travel Service is an international travel agency approved by China's national tourism bureau, while China Xpress is involved in travel-related services, consumer finance, credit cards and commercial lending.

A-Sonic, a Singapore-based aircraft and avionics retro-fitting company, is also bidding for a stake in an Australian budget carrier.

The statement quoted Boeing Co.'s 2004 report as saying that China is expected to have the highest air traffic growth in the world in the next 20 years.

"Based on the projected rapidly growing air transportation industry in (China), the company believes that the prospects of the aviation industry in
the long run should continue to remain healthy, barring unforseen circumstances," A-Sonic said.

No-frills carriers are mushrooming across Asia, sparking a fierce price war. - AFP