TAIPEI (AFP) - Taiwan's TransAsia Airways said on Thursday a low-cost carrier it aims to launch later this year will be called "V air" as it seeks to tap the growing budget travel market.

TransAsia said it picked "V air" out of nearly 8,000 entries in a public naming contest while the new carrier's Chinese name will be "Wei Hang", which means "mighty airline" in English.

"V can stand for voyage, vision, vivid, or victory which symbolise the positive energy a new company requires and can help boost the public's preference and acceptance of the new company," it said in a statement.

Two winners of the naming contest are entitled to unlimited free flights on the budget airline for 10 years, it said.

The company, Taiwan's first private airline, said in November last year it would spend around Tw$3 billion (S$127 million) to launch Taiwan's first low-cost airline catering to the needs of Taiwanese travellers.

TransAsia plans initially to lease two to three brand-new Airbus A320/A321 planes and hopes to start flying by year's end.

TransAsia - which flies to Japan, Singapore, South Korea and Vietnam - has been expanding as it benefits from increased revenues from new China routes that have opened up in recent years as relations between Beijing and Taipei have improved.

Demand for discount flights has been rising in Asia. Twelve foreign budget airlines, including Malaysia-based AirAsia and Japan's Peach Aviation, offer services to and from Taiwan.

Taiwan's leading carrier China Airlines announced in December that it would set up a new no-frills airline in a joint venture with Singapore's budget carrier Tigerair, expected to become operational in 2014 with three A-320s.