ANA (All Nippon Airways) (Tokyo-Haneda) and First Eastern Investment Group have announced the signing of a Memorandum of Agreement (MOA) to establish the first Japanese low cost airline. The new airline will operate both international and domestic short-haul routes out of Osaka (Kansai International Airport). The new airline will operate independently from ANA.

The new company will be established in the second half of 2010 with Japanese investors holding a 66.7% stake of which ANA will hold a 39% stake and First Eastern will hold the remaining 33.3% stake, the maximum foreign ownership currently allowed for an airline in Japan. The new company’s air transport operations are expected to commence in the second half of 2011.

The choice of Kansai is an interesting choice since the relatively new airport is considered a high cost airport.