Australian carrier Qantas and China Eastern Airlines will launch a new Hong Kong-based budget carrier as they try to tap into Asia's booming aviation market, they announced Monday.

The airlines have formed a joint venture to start the first Hong Kong-based budget carrier, Jetstar Hong Kong, in 2013, which will have a market capitalisation of US$198 million, they told the Australian Stock Exchange.

The new low-cost carrier will service short-haul routes, including in China, Japan, South Korea and Southeast Asia, the partners, who will each have an equal stake in Jetstar Hong Kong, said in a statement.

"We believe there are huge opportunities in the Jetstar low fares model throughout Asia, including Greater China," said Shanghai-based China Eastern's chairman, Liu Shaoyong.

Jetstar is a Qantas's budget carrier that flies domestic Australian routes as well as international routes to Asia.

"We see tremendous potential for the Qantas Group in Asia and we're looking forward to working more closely with China Eastern Airline to deliver on it," Qantas Chief Executive Alan Joyce said in a statement.

The announcement came just over two weeks after Qantas, which has been struggling to refocus on the lucrative Asian market, revealed that talks over the formation of a premium joint-venture Asian airline with Malaysia Airlines collapsed.