In Chinese astrology the pig usually symbolizes prosperity and luck.

And the auspicious year of the pig may well spell new opportunities for the nation's aviation industry.

The regional aviation market, although still in the fledgling stage, may soon take off as a number of carriers enter the game, betting on its huge potential and more favorable policies from the government.

While still focusing on highly competitive trunk-line routes, the nation's three largest airlines might speed up the process of building partnerships with their international counterparts to carve out a bigger share of the market.

"For years, the regional aviation market has been a hot discussion topic, but there have been few actual changes," said Li Lei, an aviation analyst with CITIC China Securities.

"But things started to change last year and I am anxious to see more exciting news this year," said Li.

Li said there were a number of small carriers determined to push ahead with regional air routes.

Regional air services, also known as feeder-line services, operate flights between small cities, with routes typically between 500 and 1,000 kilometers. The services usually use aircraft which seat less than 100 passengers.

In December Shenzhen Airlines signed an agreement to set up a feeder airline with US regional carrier Mesa Air Group. The new company, China's first Sino-foreign joint venture in regional aviation, will begin flying this year.

China Express Airlines, the nation's youngest private carrier, launched its maiden flight in September in Southwest Guizhou Province. The service links Guiyang, the capital, with Liping, a small city.

Okay Airways, China's first private airline, signed a framework agreement in November to buy 30 MA60 turboprops from China Aviation Industry Corp I.

The airline plans to explore feeder-line service markets in Northeast, Northwest and Central China in the next five years.

Hainan Airlines signed China's largest single order for regional aircraft in August, buying 100 regional jets, including 50 ERJ145s and 50 E190s, from Embraer. The first aircraft should be delivered this year.

The carrier, which currently owns the largest regional jet fleet in China, is building a company base in Tianjin to serve its regional air services.

"They can explore new markets where there is less direct competition from the three largest airlines," Li said, adding that the smaller airlines could also benefit from more favorable government policies.

Last month the General Administration of Civil Aviation (CAAC) started to subsidize airlines flying regional routes in Northwest China. Under the program the first time airlines have been subsidized more than 10 million yuan will be spent to promote air services.

"Northwest China is a pilot for the subsidy program. We want to encourage airlines to increase the frequency of services on feeder lines and launch new regional routes," the CAAC said on its website.

Over the past decade priority has been given to developing trunk-line services and less than 9 percent of the over 900 aircraft in service in the country are regional planes, while globally feeder jets account for 34 percent of the world's total airliners.

Government Incentives

Chinese airlines have been reluctant to develop regional routes mainly due to high costs. The combined import tax and VAT (value added tax) for a regional aircraft is 23 percent, but for a trunk airliner, such as a Boeing 737, the combined tax is only 5 percent. Regional jets also face the same airport charges, despite their smaller size.

But things might change now as the government plans to boost the economic growth of remote areas. The CAAC issued a series of measures at the beginning of last year to encourage regional aviation, including simplified processes for purchasing or leasing imported regional aircraft and subsidies for some carriers and airports.

"The Chinese regional aviation market is gradually taking off and there is strong potential demand. Hainan Airlines' order for 100 feeder jets is the best evidence," said Jiang Da, deputy general manager of Harbin Embraer Aircraft Industry Co Ltd, a joint venture between Embraer and China Aviation Industry Corp II.

Harbin Embraer is the Brazilian company's only aircraft assembly line abroad and will deliver 50 ERJ145 jets to Hainan Airlines. The company will increase the number of people it employs from 176 to 240 next year.