An Air Koryo aircraft sits parked in front of houses outside Pyongyang airport on April 17, 2017.

North Korea's Air Koryo plans to launch charter flights between Pyongyang and Chengdu in south-west China, two airline officials told Reuters, amid a major improvement in diplomatic relations between the neighbours.

The flights to Chengdu, one of the biggest cities in China's vast western region, could start as early as late June if approved by China's aviation regulator, the officials told Reuters on condition of anonymity.

"At the moment this is still a plan. Whether it can actually take off will be impacted by the policy environment going forward," said one of the officials, who said an application to the regulator had not yet been submitted.

"Now perhaps it's Chengdu, afterwards could be Dalian, Guangzhou. If there's a market we'll fly, if not we won't," he said, noting Chinese travel agencies were involved with marketing the flights to potential customers.

China has traditionally been politically isolated North Korea's closest ally but ties have been frayed by Pyongyang's nuclear weapons programme and Beijing's backing of tough U.N. sanctions in response.

Relations have, however, improved of late. Chinese President Xi Jinping and North Korean leader Kim Jong Un have held two meetings in China since March as North Korea prepares for a planned summit meeting with U.S. President Donald Trump.

Air Koryo already offers regular flights from Pyongyang to the north-east cities of Beijing and Shenyang, and the eastern port city of Shanghai. Revenues from Chinese tourists would provide a welcome boost to North Korea's closed economy.

Tourists from China account for about four-fifths of foreign visitors to North Korea, says South Korean think-tank the Korea Maritime Institute, which estimates tourism generates revenue of about $44 million each year for the country.

Air China Ltd indefinitely suspended flights from Beijing to Pyongyang in November, citing a lack of demand. Those were the only flights by a Chinese carrier to North Korea.