Japan’s biggest airline is joining forces with Malaysian budget carrier AirAsia to create a new low-cost airline to be based in Japan.

All Nippon Airways announced the creation of AirAsia Japan Thursday in a joint press release with AirAsia. The companies say AirAsia Japan will be the first low-budget airline to operate out of Tokyo’s Narita International Airport, servicing both domestic and international routes when it begins operating in August 2012.

Tony Fernandes, AirAsia’s chief executive officer, says the new venture will boost economic growth within Asia, and “enhance links within trade, travel and tourism.”

ANA will hold a 67 percent share in AirAsia Japan, with the remaining 33 percent held by AirAsia.

The new venture continues ANA’s expansion into low-cost air travel. Earlier this year, it formed Japan’s first bargain air carrier, Peach Airlines, with Hong Kong-based First Eastern Investment Group. Peach Airlines will begin operations from Kansai International Airport in the western city of Osaka in March 2012.