Malaysia's AirAsia eyes Japan tie-up

Southeast Asia's largest budget carrier AirAsia is expected to partner Japan's All Nippon Airways (ANA) to launch a new low-cost airline to boost revenue, a report said Friday. An announcement to set up the airline, called AirAsia Japan, will be made next week, The Star newspaper said, adding that the new carrier will initially serve domestic markets and eventually the region. AirAsia would drive operations, as it does in its other joint ventures in Thailand, Vietnam, the Philippines and Thailand, and hold an equity stake, the newspaper said. The budget carrier's long-haul airline AirAsia X flies to Tokyo's Haneda airport. AirAsia officials could not be reached for comment. It is not clear if the planned tie-up will involve ANA's budget airline, the Star said. ANA, Japan's largest carrier, in February set up the country's first budget carrier under the name "Peach Aviation" with Hong Kong and Japanese investment funds. Anticipating booming Asian travel demand, the company was set up to be Japan's main low-cost carrier operating both international and domestic routes. It aims to begin domestic services out of Kansai International Airport in the Japanese city of Osaka in March 2012. Service between Kansai and Incheon airport in Seoul will commence no later than May 2012, the airline said.