The establishment of Urumqi Airlines has been approved, the Civil Aviation Administration of China said on Tuesday.

Based in the Xinjiang Uygur autonomous region, the airline will have registered capital of 3 billion yuan ($492 million), with Hainan Airlines, the country's fourth largest carrier, investing 70 percent.

Urumqi Urban Construction Investment will invest the remaining 30 percent, sinking 900 million yuan into the new airline, the CAAC said.

Urumqi Airlines has applied to operate a domestic passenger and cargo business as well as international business from Urumqi. Staff members, including pilots, technicians and flight attendants, will be recruited from Hainan Airlines initially.

The CAAC on Tuesday also issued a business license to Air China Inner Mongolia, a subsidiary of Air China launched in 2012.

The Inner Mongolia airline, with founding capital of 1 billion yuan, will buy four Boeing 737s.