Tibet Airlines Co. Ltd. will be established in May and be China's first airline based in southwestern Tibet Autonomous Region, sources in charge of the company's preparatory team said Thursday.

Tibet Airlines, with a registered capital of 280 million yuan (41.2 million U.S. dollars), will be headquartered at Konggar Airport in Tibet's capital, Lhasa, and will provide domestic cargo and passenger services, said Cheng Hui, head of the preparatory team for Tibet Airlines.

The company will have 20 aircraft within the first five years of operation and the airlines fleet will expand in line with market demand, said Cheng. "Our top choices will be Boeing 737 and Airbus A319."

All the planes will be modified to adapt to the plateau environment, and flights will begin in mid 2011, Cheng said.

He said most employees will be recruited locally from Tibet.

State-owned Tibet Investment Co. Ltd. will own a 51 percent stake in the company while the remainder will be held by two Lhasa-based investment companies, Sanli and Ruiyi.

The establishment of Tibet Airlines was approved by the General Administration of Civil Aviation in March, amid robust growth in Tibet tourism.

Currently, Air China has a 50 percent share of Tibet's aviation market.