Japan's All Nippon Airways (ANA) has agreed to launch a new low-cost airline with Hong Kong's First Eastern Investment group.

The new carrier is expected to begin operations in the second half of 2011 and will operate on domestic and international routes out of Osaka Kansai International Airport, says ANA.

It will be managed independently from ANA and will not fly under the carrier's brand, it adds.

Japanese investors will hold a 66.7% stake in the airline, of which ANA will hold a 39% stake. First Eastern will have a 33.3% share.

"We anticipate an increase in passenger traffic demand in east Asia, and came to the conclusion that a low-cost carrier would be the right approach to compete effectively in this market," says ANA's president and CEO Shinichiro Ito.

The new carrier will launch operations with a single aircraft type and will price fares to be "competitive with other low-fare transportation providers such as bus and train operators", says ANA.

ANA's partner, First Eastern, has invested in over 100 projects in China including infrastructure projects, light industries and real estate developments.

"We are confident that our regional expertise and networks will contribute significantly to the success of our new joint venture with ANA," says First Eastern's chairman and CEO Victor Chu.

Source: Air Transport Intelligence news