The company will invest about S$5.4 million in cash for a 25 percent stake in the joint venture.

The new venture is seeking approval to run the low-cost carrier from Guangzhou, in the southern province of Guangdong.

A-Sonic says it will have exclusive rights to the repair and overhaul, management services and fleet maintenance of the carrier's fleet.

It will also handle aircraft and engine leasing, giving the company an added revenue stream.

"We do not expect any material financial impact on our financials because we will only start operations in the second half of 2005," said Janet Tan, chief executive of A-Sonic.

"We aim to be profitable 18 months after our operations and depending on the market perception of us being a premium foreign joint-venture airline who offers domestic range of airfares," she said.

A-Sonic will fund its stake purchase with internal resources and net proceeds from its IPO.

A fourth shareholder with a 19 percent stake has yet to be disclosed.

But it is likely to be freight forwarder and cargo handler Airocean Group.

Airocean's chief executive Thomas Tay said his company will "announce a decision very soon."

A-Sonic says it will focus on China's domestic market before going regional.

The company is also bidding for an indirect stake in Australian low-cost carrier SkyWest.

Going forward, A-Sonic says it plans to establish inter-airline connectivity between SkyWest and airlines in China. - CNA