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Japan Airlines to set up low-cost carrier, targeting Asian demand

Reuters  |  TOKYO 

By Sam Nussey

TOKYO (Reuters) - Airlines Co Ltd (JAL) is launching a low-cost to long-haul flights, aiming to tap growing Asian demand for

The new will be based at and will offer flights to Asia, and the Americas, JAL said in a statement on Monday.

The as-yet unnamed plans to start flying in the summer of 2020 with two wide-body 787-8 aircraft.

JAL will invest 10 billion yen to 20 billion yen ($91.44 million to $182.88 million) in the business, with the aim of reaching profitability within three years from the launch, the company said.

Budget flights have been slow to take off in Japan, which is dominated by full-service carriers JAL and and has a sophisticated high-speed rail network, but with growing numbers of travellers taking to the air the two Japanese airlines are looking to expand their low-cost offerings.

ANA has said it will launch medium-length international flights, potentially flying as far afield as India, as it integrates its low-cost carrier units under the Peach brand name.

JAL, by contrast, holds only a minority stake in Jetstar Japan, a joint venture with Qantas Airways Ltd's low-cost brand Jetstar which flies narrow-body aircraft. JAL said it would continue to invest in Jetstar

The new is a totally different proposition from Jetstar Japan, which "is purely short-distance", JAL's new told reporters. Jetstar has given its approval for the move, the said.

A for Jetstar was not immediately available for comment.

JAL said it plans to have outside investors in its new low-cost carrier which will be a

Other players are also looking to take advantage of Japan's growing status as a tourist destination, with having relaunched and airlines such as and Singapore's adding flights to Japan.

($1 = 109.3600 yen)

(Reporting by in Tokyo; Additional reporting by Maki Shiraki in Tokyo and Jamie Freed in Singapore; Editing by Muralikumar Anantharaman)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Mon, May 14 2018. 10:59 IST