Malaysia Airlines said it is unfazed by the launch of new long-haul budget carrier AirAsia X, which will operate cheap flights to Britain and other European and Asian destinations, reports said Saturday.

The national carrier, which November returned to profitability after five consecutive quarters of losses, said there was room for both a full-service airline and a long-haul budget carrier in Malaysia, the New Straits Times reported.

"The models cater to, and serve, different market segments and routes. Passengers will always choose based on their specific needs," the carrier said in a statement to the newspaper.

"We wish AirAsia X the best in this highly competitive marketplace," it added.

Taking off in July

Malaysia Airlines currently operates a direct Kuala Lumpur to London route, and also has flights to key European destinations of Frankfurt, Paris and Rome.

AirAsia X will take off in July with flights to Britain for as little as RM9.99 (US$2.84), with other European destinations, China and India to follow.

Newspaper reports have said that the new venture in Britain will likely to operate out of either Manchester in northern England or Luton, just outside London.

The new airline will be operated by Malaysian carrier Fly Asian Express (FAX), which is founded by Tony Fernandes, the chief executive of leading low-cost carrier, AirAsia.

Malaysia's Transport Minister Chan Kong Choy has played down fears of a damaging impact on Malaysia Airlines, saying "in principle we want two champions".