UPDATE 1-Jetstar, JAL to launch low-cost carrier by 2012-end - Nikkei

Thu Aug 11, 2011 2:50pm EDT

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Aug 12 (Reuters) - Qantas Airways Ltd unit Jetstar Airways has agreed to form a 3 billion yen ($39 million) low-cost carrier joint venture with Japan Airlines Corp (JAL) and Mitsubishi Corp , the Nikkei business daily reported.

Jetstar Japan, which will use the Australian firm's brand as well as its operation, reservation and sales systems, will begin domestic and international flights out of Narita airport by December 2012, the Nikkei said.

Mitsubishi is expected to reduce its 33.4 percent interest in the company by next summer, when new shareholders are brought in. It is looking to make profits by handling the leasing of Airbus SAS aircrafts to the new carrier, the daily added.

Jetstar recorded highest sales among budget air carriers in the Asia-Pacific region last year, the Nikkei said. ($1 = 76.780 Japanese Yen) (Reporting by Aman Shah in Bangalore)

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