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Peach Aviation prepares to take off

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Undeterred by the economic and business disruption caused by Japan's deadly earthquake and tsunami, Japan's first budget airline Peach Aviation still plans to launch operations in Osaka early next year.

The airline, formed by Hong Kong's First Eastern Investment Group, All Nippon Airways and the government-owned Innovative Network Corp of Japan, begins operations in March next year.

While First Eastern's chairman Victor Chu said it was too early to gauge the March 11 earthquake's impact on business, he said the airline's home-base city of Osaka had benefited rather than been disadvantaged so far.

'In the long run, Tokyo could still be affected by power shortages, but so far Osaka remains more or less normal in its everyday activities. Some big corporations based in Tokyo have even considered forming a second headquarters in Osaka.'

However, Chu said the nuclear crisis at Fukushima would still affect foreign investment in Japan. While Peach was keeping to its original development plan, investors and management were already reviewing the business outlook and strategies.

'We may have to diversify our clients from leisure travellers and tour groups to other areas,' Chu said. 'Inevitably the disaster will increase Japan's reliance on the mainland economy, but whether the incident will increase the rate of Japanese corporates outsourcing their works to China, we will have to wait and see.'

Before the crisis, he expected the number of Chinese travellers to Japan would triple from 1.35 million last year to about four million next year.

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