Jetstar, JAL confirm plans for budget airline

Japan Airlines has confirmed that it will sign off on a joint venture with Jetstar, and launch low-cost domestic flights next year.

JAL and Jetstar, a Qantas subsidiary, will each hold 30 percent stakes, the Nikkei daily said.

The deal was mooted in March this year and is expected to be signed off next month with other investors expected to include Mitsubishi and Toyota.

The new discount airline – expected to eventually fly international routes – may serve Tokyo’s Narita airport, which is expanding its landing slots, the business daily said.

JAL filed for bankruptcy in January 2010, and is expected to record a sharp drop in revenue and profit this year as a result of the March 11 earthquake and tsunami in Japan, Nikkei said.