Cheap Frills: ANA and AirAsia Launching Budget Airline

Next time you need to get to Japan but don’t have too much cash in your pocket, you may be in luck.

AP reports that ANA (All Nippon Airways) and Malaysian budget carrier AirAsia are working together to launch a budget airline in 2012 that will serve Japanese domestic travelers as well as international travelers that are flying in and out of Japan.

ANA is Japan’s largest airline but “it has been seeking to strengthen its foothold in the low-cost market amid growing competition,” AP reports. The deal follows news last September that ANA planned to launch a new low-cost carrier in the region.

In Southeast Asia, budget airlines make up more than 30% of the airline market, the title notes. However, in Japan, budget airlines only account for about 10% of the travel. 

So why invest? Competition. AP notes that the market is expected to grow a good deal in the next few years. ANA’s rival, Japan Airlines, “may also make a move into budget aviation,” the report states. “The airline, which is restructuring after filing for bankruptcy last year, is reportedly in partnership talks with Australia's Jetstar Airways.”

AirAsia is trying to grow fast enough to be one of the world’s largest airlines by 2020, while ANA is seeking to boost its brand awareness and bottom line (witness its new global smartphone app), so this partnership certainly would help boost both brands.