CAIRO- Jordan's Aqaba special economic zone authority signed an investment agreement to establish a privately-owned Saudi-Jordanian airline with a capital of $20 million, Jordan's PETRA news agency reported on Sunday.

The new airline, to be headquartered in Jordan's port city of Aqaba, will operate flights to the capital, Amman, and to European, Arab and Gulf countries under the name Fly Aqaba, the state news agency said.

It will operate two planes as a first stage.

(Reporting by Ahmad Elhamy Editing by Frances Kerry) ((ahmad.elhamy@thomsonreuters.com; +201023399104; Reuters Messaging: ahmad.elhamy.thomsonreuters.com@reuters.net))