Golden Dragon received rights to fly to mainland cities Nanning, Shijiazhuang, Nanchung, Zhengzhou, Jinan, Changsha, Guangzhou and Hohhot, as well as Hanoi in Vietnam and Vientiane in Laos, said an industry source.

The approvals came after it reached a sub-concession license agreement with Air Macau to operate from the city. Sources earlier said tycoon Stanley Ho's helicopter unit, East Asia Airlines, will take a majority stake in Golden Dragon after the sub-concession talks.

``Golden Dragon only has three destinations overlapping with Dragonair's existing ones, reflecting the government's arrangements during the negotiations,'' said the source.

Dragonair and Air Macau are controlled by China National Aviation Corp. Golden Dragon's approved destinations also largely avoid competition with Hong Kong Express, a Hong Kong-based budget airline also controlled by Ho, which has been granted rights to fly to Guangzhou, Hangzhou, Nanjing, Chongqing and Ningbo.

``Both companies will not complete with each other,'' said Hong Kong Express chief executive Andrew Tse.

Golden Dragon will need to invest 160 million patacas (HK$155.3 million) to develop the business and pay 10 percent of total investment to the Macau government for the license. It will lease two 75-seat Embraer aircraft this year and plans to schedule flights next year, said the source. ``Golden Dragon will act as a regional airline in the future, not a low-cost carrier,'' he said.

Macau is an attractive base for budget carriers because of its low airport charges and the rosy outlook for its gaming-led tourism sector.

Air Macau along with two partners plans to start a budget airline at the end of the year in which it will invest US$30 million (HK$234 million) for a 51 percent stake. The new carrier will fly 22 mainland and regional routes with four aircraft to be delivered next year. Wow Macau, another start-up in talks with Air Macau for sub-concession licenses, has been pushing for medium-haul destinations in Europe and the Middle East.

Meanwhile, Hong Kong-based budget carrier Oasis Hong Kong Airlines has applied to the Air Transport Licensing Authority for six destinations - London Gatwick, Cologne/Bonn, Berlin, Milan, Oakland and Chicago.

However, the Civil Aviation Department said it has not yet granted it an air operator's certificate. alman.loong@singtaonewscorp.com