Japan Airlines Co. said Monday it plans to launch a new budget airline operating medium to long-haul flights in summer 2020 when the Tokyo Olympics and Paralympics will be held, marking its full-fledged entry into the expanding low-cost carrier market.

The budget airline, which will be set up as a JAL group subsidiary in July this year, will operate flights from Narita airport, east of Tokyo, to destinations in Asia, Europe and the Americas, initially using two medium-sized Boeing 787-8 aircraft.

"We want to play a role in boosting foreign travelers to Japan," JAL President Yuji Akasaka said at a news conference in Tokyo.

The airline's entry into the LCC market has so far been limited to a 33.3 percent stake in budget carrier Jetstar Japan Co., the same ratio of interest held by Australia's Qantas Group.

(JAL President Yuji Akasaka)

The new budget airline will expand JAL's LCC flight coverage, with Jetstar operating only domestic flights and short-haul international flights between Japan and other Asian cities.

Rival ANA Holdings Inc., meanwhile, announced in March that it will integrate its low-cost carrier affiliates Peach Aviation Ltd. and Vanilla Air Inc. and start middle-distance international flights within Asia in around 2020.

LCCs currently make up some 10 percent of domestic flight passengers. The figure is expected to rise further to some 30 percent, the level seen overseas, in the near future, while the Japanese government aims to increase the number of foreign visitors to 40 million by 2020 and 60 million by 2030.