Qantas, Japan Air, Mitsubishi to launch carrier

The low-cost airline will be one-third owned by each company and will begin operations with three new A320s, each capable of carrying 180 passengers.

The plan is to expand to 24 aircraft within the first few years, most of them purchased new.

Total investment for the new carrier is 12 billion yen (US$1.6 billion).

Qantas chief executive Alan Joyce called it a "historic" step for Jetstar, which is the Australian airline's budget offshoot and also the Asia-Pacific's fastest growing carrier, carrying almost 20 million passengers a year.

"This is a major opportunity in a major market," he said, adding that Qantas had a proven ability to operate low-fare airlines.

"It is, we think, the first joint-venture partnership of its kind between an Australian company and two iconic Japanese brands."

It will initially fly domestically from Tokyo's Narita airport and Osaka, with other destinations under consideration.

Ultimately, it plans to offer short-haul international services to key Asian cities.

JAL president Masaru Onishi said the partnership would allow the Japanese airline to competitively serve a larger part of its domestic market, as well as stimulating an economy hit hard by natural disasters.

"It will encourage even more movement of people within the country and also increase the number of visitors from Asia to Japan," he said.

"We anticipate this to stimulate consumer spending and play a role in revitalising the Japanese economy."

Jetstar boss Bruce Buchanan added that the new venture would also help keep fares low.

"Jetstar is about bringing exciting travel options within reach of more people, by offering sustainably low fares," he said.

"As Jetstar expands into new markets across Asia, it gives us economies of scale to strengthen the low cost advantage right across our network, including within Australia and New Zealand."

As part of rebuilding its international operations, Qantas also plans to set up a new premium airline based in a yet-to-be decided Asian destination, to cash in on the growing wealth in the region.

The joint venture will not be branded under the Qantas name but will leverage the airline's know-how. Eleven A320 aircraft will initially be used, Joyce said.

"We have narrowed down our location options and an announcement will be made when we have completed negotiations," he said, adding that the future in Asia was not all about low-cost airlines.

"Within 20 years, 16 per cent of the world's middle class will be in East Asia," he said.

"China may already have the world's fourth largest population of millionaires, and India the twelfth. There are many, many millions of premium travellers in waiting."