LANGKAWI (REUTERS, AFP) - Malaysia's government on Tuesday announced the establishment of a new airline, called flymojo, and said it has signed a deal with Canadian planemaker Bombardier Inc to buy 20 CS100 aircraft for about US$1.47 billion (S$ 2.04 billion).

The announcement, made in the presence of Prime Minister Najib Razak at the Langkawi International Maritime and Aerospace exhibition, included an option to buy 20 more aircraft, taking the deal value up to US$2.94 billion.

The new airline will be based out of Johor Bahru, Johor, and Kota Kinabalu, Sabah.

"The announcement of a new airline in Malaysia is an exciting way to kick off LIMA," Aziz Kaprawi, deputy transport minister said in a statement.

"With flymojo's primary hub at Senai International Airport, Johor and secondary hub in Kota Kinabalu, Sabah, the airline's ultra-modern fleet of CS100 aircraft will play a key role in improving connectivity between the Peninsula and Sabah and Sarawak, as well as other parts of the region," he added.

The launch of the new airline will comes as much-needed welcome news for the country's aviation industry.

In March last year Malaysia Airlines Flight 370 with 239 people on board went missing over the Indian Ocean and has still to be found. Then in July, all 298 people on board another Malaysia Airlines 777 died when it came down in rebel-held territory in Ukraine, believed to have been hit by a surface to air missile.

And in December AirAsia Flight 8501 crashed in the Java Sea, killing 162 people onboard.