Jetstar battles headwind for HK takeoff

27-Aug-2013 Intellasia | The Age | 6:00 AM Print This Post

Jetstar HK faces stiff opposition from Cathay Pacific to its bid to launch flights by the end of the year, after the incumbent airline claimed the new entrant did not meet the Asian city’s constitutional law.

HK’s national carrier also warned that the local economy and aviation industry would be damaged by putting ”valuable and limited air-traffic rights into the hands of a carrier controlled by a foreign airline”.

Jetstar HK is a joint venture between Qantas, Shanghai-based China Eastern Airlines and more recently Shun Tak Holdings, the HK conglomerate founded by gambling and shipping billionaire Stanley Ho.

Qantas had originally planned to launch the budget offshoot in the middle of the year but delays in regulatory approval make it unlikely to get off the ground until at least December.

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In a boost to its bargaining position, the budget airline named Pansy Ho, one of the richest women in HK and daughter of Mr Ho, its chairwoman on Friday. She replaces China Eastern vice-president Tang Bing, less than a year after he was named Jetstar HK chairman.

The appointment of the well-connected HK businesswoman will add clout to Jetstar HK’s licence application.

But, in a sign of the fight it will put up, Cathay said the budget airline did not meet HK’s Basic Law requiring airlines to have their principal place of business in the city in order to gain regulatory approval.

”Our review of this application will not change the fact that Jetstar HK is a carrier that is a franchise of and controlled by Jetstar Australia and its parent, Qantas Airways,” Cathay said in a statement.

”It also will not change the fact that putting some of HK’s valuable and limited air-traffic rights into the hands of a carrier that is controlled by a foreign airline would also be very damaging to the local aviation industry and the HK economy.”

Despite the opposition, Jetstar was confident the HK offshoot would meet all the requirements, including that concerning its principal place of business. A spokesman emphasised that Jetstar HK was managed by a local team that included chief executive Edward Lau.

Cathay and other interested parties have two weeks to lodge their positions with HK regulators.

Jetstar HK hopes to fly A320 aircraft to a long list of Asian countries.

Macquarie Equities analysts have maintained Jetstar HK faces a ”much fiercer” competitor response from Cathay than the Jetstar offshoot has experienced in Japan.

http://www.theage.com.au/business/jetstar-battles-headwind-for-hong-kong-takeoff-20130825-2sjsb.html

 


Category: Hong Kong

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