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China's Hainan Airlines is set to hold a controlling 49 percent stake in the restructured Royal Air Cambodge (RAC), Cambodia's national flag carrier, according to an agreement signed here recently.

The framework pact signed between Hainan Airlines, the Cambodian government and the Cambodian CTG company allows the Chinese airlines' a 49 percent stake in the new RAC, which will have a registered capital of 10 million U.S. dollars.

Hainan Airlines will be the largest shareholder in the new airlines. It will also be the first Chinese airlines to participate in the formation of a foreign national airlines, industrial sources said.

Launched in 1994, RAC was once operating seven international air routes to Bangkok, Kuala Lumpur, Guangzhou, Shanghai and other cities, before mismanagement forced it to stop operation last October.

The new Cambodian national airlines will replace RAC and enjoys priority on both domestic and international routes.

In the beginning of its operation, the new Cambodian airlines is expected to acquire two Boeing 737-400 jets from Hainan airlines in the form of wet renting.

Hainan Airlines is one of the most successful local airlines in China. The group now owns a fleet of 60 airplanes and offers nearly 2,000 flights a week.