Sydney: Australia's Qantas Airline has entered into a joint venture agreement with China Eastern Airlines to launch a low-cost airline in Asia.

Jetstar Hong Kong will begin flights in 2013, flying short-haul destinations in Asia, China, Japan and South Korea, Qantas announced on Monday.

The maximum capitalization of establishing the airline will be $198 million, it added.

"The shareholding percentage in Jetstar Hong Kong will be equally held by China Eastern Airlines and Qantas Group, which will be equal partners in the joint venture," Qantas said in a statement.

Qantas CEO Alan Joyce said the agreement will build a strong platform for accessing the world's largest, fastest growing and most profitable aviation market.

China Eastern Airlines Chairman Liu Shaoyong said the airline was pleased to be extending its 20 year relationship with the Qantas Group.

The Jetstar Group is Asia Pacific's fastest growing and largest low fares network by revenue, with airlines in Singapore, Japan, Vietnam, Australia and New Zealand.

It operates up to 3,000 flights a week to almost 60 destinations.