BEIJING, June 1 -- Hainan Airlines Co, China's fourth-biggest carrier, is planning to set up a regional airline in Tianjin to tap demand in the country's north.

    The new carrier, Grand Air Express, is part of Hainan's plan to build a regional hub in Tianjin, company officials said.

    Hainan Airlines, which is 14.8 percent owned by US financier George Soros, and its parent, HNA Group, will invest a total 100 million yuan (US$12.5 million) in the new carrier, to be based at Tianjin Binhai Airport, the company said in its application to the industry regulator.

    HNA Group will pay 80 million yuan in cash for a 80 percent stake in the new carrier, and Hainan Airlines will pay 20 million yuan for the remainder.

    The carrier will conduct regional passenger and freight services, renting at least five 32-seat Dornier 328 aircraft from Hainan Airlines during its initial operations.

    Grand Air intends to put 50 to 100 planes into the skies in three to five years to become China's biggest regional carrier.

    HNA Group is planning to combine Hainan Airlines with others such as Xinhua Airlines, Changan Airlines and Shanxi Airlines to form Grand China Air, which will focus on trunk routes.