Indonesian flag carrier Garuda Indonesia and Malaysian-based low cost carrier AirAsia are in discussions for joint operations in Indonesia.

According to a report on the Nikkei Asian Review, both carriers are in the early stages of talks and no agreements have been reached.

"AirAsia Indonesia is exploring the possibility of cooperation with Garuda Indonesia Group to leverage both carriers' strengths," Dendy Kurniawan, chief executive of the local unit of AirAsia, said in a statement.

Garuda CEO Askhara Danadiputra said AirAsia Indonesia proposed the collaboration and that Garuda is considering the offer.

"AirAsia has a strong market share in international flights. We'll see, with their international strength... we can use that to our advantage so we can push Citilink Indonesia to expand its wings," Danadiputra told reporters on Friday, referring to the low-cost unit of Garuda. "We'll take a look at the opportunities."

Indonesia is among the world’s fastest growing aviation markets, which the International Air Transport Association (IATA) predicting it will become the fourth largest air travel market by the year 2035. With its geography made up of mostly islands, air travel has become a critical means of connecting people within the country.

Any collaboration between AirAsia and Garuda Indonesia would challenge Indonesian-based low cost carrier Lion Air, AirAsia’s rival based in the region.

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