Virgin, AirAsia, EasyJet plan long-haul airline

Three of the world's popular budget airlines, including Richard Branson's Virgin, are in discussions to form a Malaysia-based long haul airline joint venture company.

Branson is in discussions with AirAsia's Tony Fernandes and EasyJet's Stelios Haji-Ioannou to form an alliance to produce what will be the world's first low-cost global network, The Star newspaper reported today.

The new joint venture will first fly between Kuala Lumpur and Manchester in Britain and Amritsar in India. There are also plans to fly to Hangzhou near Shanghai and Tianjin near Beijing, industry sources were quoted as saying.

Fares on the long distance flights will be as low as 100 ringgit ($27) for destinations in China. Fares to Britain from Kuala lumpur's low cost terminal will be between 300 ringgit ($83) and 2,500 ringgit ($695), sources said.

The Star quoted industry sources as saying that the alliance - if it decides to fly to London as well - could also use the Luton airport as a hub because Virgin already operates a rail link from there to central London.

Branson's Virgin group includes budget carriers Virgin Express and Virgin Blue.

Industry sources said a combination of the three personalities along with their companies and contacts would be "lethal". The link-up with Virgin and Easyjet would give AirAsia access to London's Standstead airport.

For Virgin and EasyJet, the link up will grant access to Kuala Lumpur's low-cost airport terminal, the gateway to a dream Asian hub for their Europe to Australia via Asia routes, the daily said.