Lion Air Australia expects to begin services with six new extended range Boeing 737's by the end of the year.

David Charlton, chief executive of Sky Air World, a small aviation business trading out of Brisbane's Eagle Farm airport, confirmed his company would own 51 per cent of the new business with Lion Air holding a 49 per cent stake, the Herald Sun newspaper said.

As a result of the deal, Lion Air Australia will have the same air traffic rights to operate as any Australian-owned airline.

Under Australian regulations a foreign investor can have a maximum 49 per cent stake in a local airline, but Lion Air president Rusdi Kiranait was reported as saying that his company would be the operator and control the business.

In a statement, both partners noted that routes, fares and frequencies were still being developed.

'We will be connecting points not currently serviced and creating a fantastic new offering for the travelling public,' Mr Charlton said, confirming however that Indonesia and Thailand would be part of the airline's network.

He said Lion Air Australia would be 'a good value carrier' offering both business and premium economy seats.

'We will offer a good value for money product for the holiday and business traveller, including connections between Australia and its most populous neighbour, Indonesia,' Mr Charlton said.

The Indonesian airline operates more than 200 services a day from Jakarta to regional destinations with a fleet of 40 aircraft.

The airline also is the first customer for Boeing's new model 737-900, 215-seat extended range jet, the first six of which will be handed to the Australian business. - BERNAMA