Japan, Australia carriers to launch budget airline

Japan Airlines Corp. (JAL), the nation's biggest trading firm Mitsubishi Corp, and Australia's Qantas Airways Ltd. have agreed to establish a low-cost-carrier joint venture in September amid rising competition in Asia's aviation market. The new budget airline, named Jetstar Japan Co., will begin domestic services by the end of 2012 with connecting its base Tokyo's Narita International Airport and Japan's key cities including Osaka, the three partners said Tuesday in a statement, adding that they plans to offer international routes to major Asian cities in the near future. Jetstar Japan will launch with an initial fleet of three new Airbus A320 aircraft, configured for 180 passengers in a single class, and aims to grow to 24 aircraft within the first few years. "We are confident that Jetstar Japan will broaden the spectrum of travellers as it creates new demand in this market," JAL President Masaru Onishi said in a statement. "It will encourage even more movement of people within the country and also increase the number of visitors from Asia to Japan," Onishi said. The venture will be capitalized at JPY 4.8 billion (USD 62 million), with expected to be raised to JPY 12 billion (USD 156 million) after the carrier starts operations. Mitsubishi will invest 33.4 percent with JAL and Jetstar Airways Pty, the Qantas budget unit, shouldering the rest equally at 33.3 percent each. The move comes amid increasing demand for low-fare travel in Japan and other Asia countries. JAL's rival All Nippon Airways Co. has already announced plans to launch two budget airlines next year, including a joint budget airline with AirAsia Bhd. of Malaysia. Asia's biggest discount carrier AirAsiaX and China's Spring Airlines have also started offering low-cost flights to Japan.