Japan Airlines Co. is examining setting up a new low cost carrier to increase capacity and take on rising competition from budget operators.

Starting a discount airline is part of the carrier's need to widen its product lineup, Vice Chairwoman Junko Okawa, 63, said in an interview in Singapore on Monday. It is one of several options the company is exploring, she said, adding no decision has been taken yet.

JAL is already a shareholder in low fare carrier Jetstar Japan Co.