Japanese carrier ANA has agreed a commercial partnership with Alitalia and announced plans to merge its low-cost subsidiaries Peach and Vanilla Air in Japan as it attempts to create “the leading low-cost carrier” in Asia.

ANA and Alitalia will commence codeshare operations on services between Italy and Japan and on domestic routes within the two countries from October this year.

The carriers will also cooperate on frequent flyer programmes.

Alitalia remains in administration pending the formation of a new Italian government which will decide on its future ownership. The Italian carrier went into administration last May but continues to operate as normal.

ANA parent company ANA Holdings announced the merger of Peach and Vanilla this week, with integration to start in the second half of this year and to be completed by the end of 2019.

Osaka-based Peach will provide the brand and main base for the merged airline, with ANA pledging to increase the carriers’ combined fleet from the current 35 to 50 aircraft.

Peach began operations in 2012 as the first low-cost carrier in Japan. Vanilla Air started flying from Tokyo Narita Airport, ANA’s main hub, at the end of 2013.

ANA said Peach would expand beyond Japan’s domestic and short-haul markets from 2020 to operate medium-haul services and “aggressively incorporate the growing travel demand in Asia”.

It said the airline would be positioned to “become the leading LCC in Asia”.