JAL to launch low-cost carrier with Qantas unit - Nikkei

An airport worker is seen with a Jetstar airplane, Airbus A320, at Avalon Airport near Melbourne March 19, 2010.

(Reuters) - Japan Airlines Corp JAL.L (JALFQ.PK) will enter the low-cost carriers market through a joint venture with Australia's Jetstar group, and launch domestic flights next year, Nikkei reported.

The venture will be capitalized at 10-20 billion yen, with JAL and Jetstar, a Qantas Airways (QAN.AX) subsidiary, holding 30 percent stakes each, the daily said.

A decision on which company will have management control will be taken later, the business newspaper said.

Mitsubishi Corp (8058.T) and Toyota Tsusho Corp (8015.T) have been invited to invest in the deal, which JAL and Jetstar aim to finalize next month, Nikkei reported.

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.

Osaka's Kansai International Airport and Central Japan International Airport outside Nagoya both of which operate around the clock, are also in the fray, the report said.

JAL took a variety of restructuring steps after filing for bankruptcy in January 2010, including reducing the number of routes, the newspaper said.

Although it logged a record consolidated operating profit of 188.4 billion yen for fiscal 2010, the company's revenue and profit are likely to plunge this year as a result of the March 11 earthquake and tsunami, Nikkei said.

JAL had kept its distance from the low-cost-carrier market, with Chairman Kazuo Inamori saying the airline would differentiate itself by offering a high level of service, the report said. (Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Joyjeet Das)