AirAsia's chief executive Tony Fernandes will open a chain of budget hotels to complement the operations of the region's most profitable low-cost carrier, a report said today.

The first in the chain of 60 to 70 hotels is expected to open for business at the end of this year in Malaysia before eventual expansion throughout Southeast Asia, the New Straits Times reported, quoting an unnamed source.

"His long-term plan is to eventually have hotels in all AirAsia destinations," the source was quoted as saying.

The chain will be called Tune Hotel.com after AirAsia's holding company, Tune Air, with 100 to 250 rooms in each hotel costing between RM50-RM100 (US$27) a night, the source said.

Fernandes is expected to either purchase or lease existing hotels and remodel them, or build new ones.

Successful airline

AirAsia was launched as a budget carrier in December 2001 with just two aircraft but now dominates the crowded Southeast Asian low-cost sector.

It offers more than 100 domestic and international flights to Malaysia, Thailand, Indonesia, Singapore, Cambodia, Vietnam, the Philippines and China, with plans to expand to India to become an Asia-wide airline.

AirAsia recently received a large boost when it was given the right to take over 99 domestic routes from troubled national carrier Malaysia Airlines.