Non-resident Keralites can buy shares in the proposed Kerala Airlines to be launched by the state government, Chief Minister Oommen Chandy said here Wednesday.

The state government had accepted the project report for the proposed airline, and it would now be forwarded to the central government for clearance, Chandy told reporters after a cabinet meeting.

Ernst & Young prepared the report and preliminary findings suggest the proposed airline would be feasible.

"Non-resident Keralites will have an important role in the proposed airline and they can participate in the venture by buying shares in the company," said Chandy.

Reports have suggested that the Kerala government would have a 25 percent stake in the airline and that this would be funded by the Cochin International Airport Limited, which would buy shares on behalf of the state government.

The rest of the equity will be offered to non-resident Keralites and financial institutions.

Chandy said: "We have to get exemptions from the centre and this includes relaxation of rules to allow the airline to fly on international routes without having three years of experience in the domestic sector."

The state would also ask the central government to set aside the stipulation that all airlines flying on international routes should have at least 20 aircraft.

Kerala Airlines will operate flights with four or five leased aircraft.

Chandy said the national carrier Air India had been taking a "not too favourable" attitude to the proposed airline and that was one reason why Kerala had not been given the benefits of India's open sky policy.

"All other states have now benefited from the open sky policy except us. We have brought this to the attention of the centre and we expect quick action from them," he said.

Some 1.5 million people from Kerala are currently settled in various Middle East countries and contribute a staggering Rs.200 billion ($4.4 billion) every year by way of remittances.