Japan Airlines Corp. said Tuesday that both it, and Australia's Qantas Airways will both hold a 42% stake in a low-cost carrier joint venture on a total investment basis.

The airline, commonly known as JAL, said the joint venture will be called Jetstar Japan Co. The new company will be capitalized at 4.8 billion yen in the initial stages. The Japanese trading house Mitsubishi Corp. will hold the remaining 16%.

After the new carrier starts operating in 2012, capitalization will be increased to 12 billion yen, and more Japanese shareholder may be invited to invest.

JAL, which dropped to Japan's second biggest carrier in terms of passenger numbers in the last fiscal year, follows another big Japanese airline, All Nippon Airways Co., in venturing into the budget carrier business.