The Malaysian government Thursday approved Malaysia's local airlines Fly Asian Xpress (FAX) to operate long-haul budget service to Asia, Australia and Europe, local media reports said.

Malaysian Transport Minister Chan Kong Choy said that the government was optimistic that the new service would help promote Malaysia as an aviation hub for international low-cost air travel.

The long-distance low-cost flight service will also help promote the tourism industry in the country, he said.

FAX has been a regional operator of air services in Malaysia's eastern states of Sabah and Sarawak since Aug. 1, 2006. The third largest airlines of Malaysia is reportedly owned by top management members of Malaysia's main budget airlines AirAsia.

AirAsia was also reportedly in talks with Virgin Group and EasyGroup, the parent company of Britain's EasyJet, to launch the world's first low-cost global alliance.