JAL, Qantas to join forces for low-cost carrier

JAPAN Airlines Corp (JAL) is planning to enter the booming low-cost carrier (LCC) market through a joint venture with Qantas LCC subsidiary Jetstar.

The venture is a surprising turn for JAL, as its chairman Kazuo Inamori has repeatedly insisted that it would keep out of the low-cost sector.

The new discount airline, which will have a capital of 10-20 billion yen (US$115-231.6 million), is scheduled to launch as early as next year. It may serve Tokyo’s Narita airport, which is expanding its landing slots.

The venture will reportedly only cover domestic routes initially, but is expected to eventually operate international flights. The decision on which company will take management control is said to be decided at a later stage. Major Japanese trading houses Mitsubishi and Toyota Tsusho have been invited to invest in the deal.

JAL and Jetstar hope to finalise the alliance by the end of July.

JAL rival All Nippon Airways (ANA) is set to start Japan’s first budget airline, Peach Aviation, with the aid of Hong Kong and Japanese investors (TTG Asia e-Daily, February 10). It aims to start domestic services out of Kansai International Airport in Osaka in March 2012.

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