Japan's ANA to launch budget Asia airline-Nikkei

TOKYO, March 26 (Reuters) - All Nippon Airways Co Ltd (ANA) (9202.T: Quote, Profile, Research, Stock Buzz), Japan's second-largest carrier, plans to set up a low-cost Asian airline in an effort to fight growing competition in the region, the Nikkei business daily said on Wednesday.

The new airline, which could be set up as early as the fiscal year starting in April, may be established as a joint venture with another Asian airline, though acquiring another firm is also an option, the Nikkei added.

Competition for passengers in the Asian region has heated up in recent years with the establishment of budget airlines such as Jetstar Airways (QAN.AX: Quote, Profile, Research, Stock Buzz), and the situation is expected to worsen with expansion planned at Tokyo's Haneda and Narita airports by 2010.

ANA will set up an office in Hong Kong from April to conduct market research and explore possibilities for the new airline, the Nikkei added. (Reporting by Elaine Lies; Editing by Chris Gallagher)