China's new air marshal force is scheduled to be up and flying by the end of this year, said a senior official the nation's top civil aviation authority.

The air marshal force, consisting of around 2,000 members selected from security personnel on duty on domestic airlines, will play an important role in security checks and anti-hijacking operations, said Yang Yuanyuan, director of the General Administration of Civil Aviation of China (CAAC).

As the special force grows, air marshals will be sent to different airlines, Yang told a press conference.

The director also confirmed that his administration had agreed to the establishment of the nation's first budget airline by a domestic privately-owned business, saying China has welcomed investment of both domestic and foreign capital into the country's civil aviation industry.

But the director stressed that safety and security standards will be elevated for low-cost airlines to ensure safe flights.

"Acquiring approval doesn't mean everything since there is a long way to go before it kicks off its operations," Yang said cautiously, adding budget flights are on a trial in China.

The low-cost airline, registered as "Yinglian Aviation Co Ltd," was reportedly funded by Guangzhou based E & Net Communications Co Ltd in South China's Guangdong Province.

The private company will establish an independent regional airline company in Chengdu, capital of Southwest China's Sichuan Province, with a registered capital of 100 million yuan (US$12 million), according to Xinhua News Agency.

Two other privately-owned companies are also expecting approvals to conduct such business, said Yang.

While stepping up its efforts to reform the nation's civil aviation industry, the commission has set up partnerships with foreign counterparts.

A co-operation agreement on areas such as air safety, air traffic control and airport management with the Federal Aviation Administration (FAA) of the United State was signed Thursday.

Both parties will also work together to create a flight standard, airplane certification, pilot training, safety data management and financing, according to the agreement.

Marion Blakey, FAA's minister, valued the Sino-US collaborations are important.

Both the challenges and opportunities that the China's civil aviation is facing are parallel to the United States, she said.

"We are ready to share the experiences and lessons in security checks during our organizing the Olympic Games in the United States with our Chinese counterparts to help with their work in Beijing Olympic Games in 2008," Blakey said.

"We are endeavoring to set up a comprehensive co-operative mechanism between CAAC and FAA to push forward the exchanges and co-operation in wider areas," she said.

Blakey was echoed by her Chinese counterpart, who said CAAC is gearing up to set up a representative office in Washington to strengthen bilateral ties.

Yang said an overall agreement on air security is in the pipeline.

In another co-operative field, from March 28, China's flag carrier Air China will start a code share operation with Japan's ANA on Sino-Japan routes operated by both airlines. The two will also work towards common frequent flyer programmes and airport lounge use.

Editor: Donald