Chinese startup Qingdao Airlines launched its inaugural flight from Qingdao to Chengdu April 26. Qingdao has become the second privately run carrier to go into formal operations since the Civil Aviation Administration of China (CAAC) loosened its grip on approving new domestic airlines by implementing more favorable policies to lower standards and simplify procedures.

The new venture formally launched in June 2013 and placed an order for 23 Airbus A320 family aircraft in September 2013, with deliveries expected to begin in 2016. It took delivery of its first A320 earlier in April on lease from Hong Kong-based China Aircraft Leasing Co. It plans to expand its fleet to five aircraft this year and to 50 aircraft by 2020.

The Qingdao-based carrier said it aims to be a “boutique airline” and plans to open domestic routes to Shenzhen, Changsha and Shenyang initially. For the longer term, it will secure approval to open more new routes to larger cities including Beijing, Shanghai and Guangzhou. It also plans to establish overnight operating bases in Beijing, Shanghai, Shenzhen, Chengdu and Xiamen.

The new carrier has a registered capital of CNY1 billion ($161 million). Nanshan Group holds a 55% stake with an investment of CNY550 million, Qingdao Transport Development Group has a 25% ownership with a CNY250 million investment, and Air China subsidiary Shandong Airlines provides aircraft to equal an investment of CNY200 million to hold the remaining 20%.