Japan Airline has been quick this morning to hose down a Japan media story that it is setting up a joint venture with Jetstar to launch a low fare domestic airline next year in which Qantas, which owns Jetstar, would hold a 30 per cent equity.

However the Japan Airlines qualification, that it is an option which is being considered, and that no decision has been made, isn’t convincing, as it has through its statement confirmed what many have long taken for granted in the industry, which is that the restructured Japan flag carrier has been in detailed discussions and negotiations with Qantas.

Japan Airlines has been put under immense pressure to address the low fare potential of the domestic Japan and regional international market by All Nippon’s decision to launch its own second brand carrier, Peach, in the near future.

Peach is being set up with a fleet of 10 single aisle 180 passenger Airbus A320s, the jet which is the aircraft of choice in low cost carrier franchises throughout the Asia-Pacific.

Qantas officially owns 49 per cent of Singapore based Jetstar Asia, which it appears to have almost 100 per cent financed, as well as 30 per cent of Jetstar Pacific, based in Vietnam.

As well as being squeezed in its operations by All Nippon Airlines, Japan Airlines faces the imminent launch of an international low cost second brand airline by Singapore Airlines, which is also unnamed at this stage but will use longer range wide body jets.

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