All Nippon Airways has confirmed it will join with AirAsia to launch a low-cost carrier based at Narita International Airport in Japan.

In a move designed to allow access the developing budget market in Asia, AirAsia Japan – as the carrier will be known – is expected to launch in August 2012.

ANA confirmed the new carrier would initially be capitalised at 5 billion yen ($65 million), with Japan’s larger carrier holding 67 per cent of the carrier and AirAsia the remaining 33 per cent.

AirAsia said it expected the carrier to make a profit in its first year of operations.
“The presence of AirAsia Japan is to serve the highly lucrative travel market in Japan,” explained a statement.

“Air travel is deeply entrenched in the social and business life of the Japanese even under a high cost environment.”

AirAsia Japan will hope to replicate the success of European budget carriers, led by Ryanair.

However, Japan has long been considered a difficult market for budget carriers.
High labour costs and stiff landing fees, coupled with limited availability of airport slots kept, have to date kept new entrants out.

Shinichiro Ito, ANA president, said: “By combining AirAsia’s business model and brand with ANA’s depth of knowledge of the Japanese market, we aim to bring new value to our customers.”

Domestic rival Japan Airlines has signed up to a joint venture agreement with Qantas-owned Jetstar to create a new discount airline.

Singapore Airlines is also planning to set up a long-haul budget carrier by the middle of next year, with Campbell Wilson recently appointed to head up the venture.