The joint venture is the first step in AirAsia’s attempt to tap into the country’s booming domestic travel industry, which is soon expected to overtake the U.S. as the world’s biggest aviation market, the BBC reports. The new airline will be based in the eastern Chinese city of Zhengzhou.

“This Chinese venture represents the final piece of the AirAsia puzzle,” the BBC quoted chief executive Tony Fernandes as saying. AirAsia also operates in Thailand, Indonesia, Japan, the Philippines and India.

AirAsia already flies to 15 destinations in China and is the country’s largest foreign budget airline. The company said it would also invest in aviation infrastructure, and set up training programs for pilots, crew and engineers.

For more on aviation in China, watch Fortune’s video:

Over the past 30 years, China’s aviation industry has grown from about four million air passenger voyages to 487 million, the BBC reports citing government figures.