ANA Group, Japan's largest airline, and AirAsia, the world's best low cost airline, announced that they are teaming up to form AirAsia Japan, a new low-cost carrier.

AirAsia Japan will be the first low-cost carrier to be based at Narita International Airport. Operating under the AirAsia brand, it is to serve both domestic and international destinations when commencing operations in August 2012, subject to obtaining the relevant approvals.

In Japan, the aviation market is undergoing rapid transformation with developments including the expansion of Open Skies agreements and increased domestic competition from road and rail-based travel. In addition, Narita airport, a major international hub serving Tokyo, is seeking to increase capacity with the introduction of a new terminal and is expected to attract many low-cost carriers and foreign airlines.

ANA has been seeking opportunities to launch a new low-cost business based at Narita and, after analysis, has concluded that partnering with an existing low-cost carrier is the most efficient and strategically advantageous option.

Having already established an unmatched network,especially within the ASEAN region, AirAsia has been seeking a business partner with strong Japanese market influence to further expand its scope, as well as contribute to strengthening bilateral ties between ASEAN andJapan.

The formation of AirAsia Japan leverages AirAsia's successful business model and brings together the complementary strengths of the two companies, generating new demand with the aim of making affordable and quality travel available to all.