Jetstar Hong Kong faces stiff opposition from Cathay Pacific to its bid to launch flights by the end of the year, after the incumbent airline claimed that the new entrant did not meet the Asian city's constitutional law.
Hong Kong's flag carrier has also warned that the local economy and aviation industry will be damaged by putting "valuable and limited air-traffic rights into the hands of a carrier controlled by a foreign airline".
Jetstar Hong Kong is a joint venture between Qantas, Shanghai-based China Eastern and more recently Shun Tak Holdings, the Hong Kong conglomerate founded by gambling and shipping billionaire Stanley Ho.
Qantas had originally slated the middle of this year for the launch of the budget offshoot but delays in gaining regulatory approval has meant that it is unlikely to get off the ground until at least December.
In a boost to its bargaining position, the budget airline named Pansy Ho, one of the richest women in Hong Kong and the daughter of Mr Ho, as its chairwoman on Friday. She replaces China Eastern vice-president Tang Bing less than a year after he was named as Jetstar Hong Kong chairman.
The appointment of the Hong Kong businesswoman will add clout to Jetstar Hong Kong in its application for a licence to fly scheduled services. But in a sign of the fight it will put up, Cathay said the budget airline did not meet Hong Kong'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 Hong Kong is a carrier that is a franchise of and controlled by Jetstar Australia and its parent, Qantas Airways," it said.
"It also will not change the fact that putting some of Hong Kong'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 Hong Kong economy."
Its latest rhetoric is more forthright than comments from Cathay's senior executives, who have been coy about their airline's response to the threat posed by Jetstar Hong Kong on its home turf.
Despite the opposition, Jetstar said it was confident the Hong Kong offshoot would meet all the requirements for approval, including that concerning its principal place of business. A spokesman emphasised that Jetstar Hong Kong was managed by a local team that included chief executive Edward Lau.
Cathay and other parties have two weeks to lodge their positions with Hong Kong regulators.
Jetstar Hong Kong's application for a licence details plans to fly A320s to a long list of destinations in China, South Korea, Vietnam, Thailand, Japan, Taiwan, Indonesia and the Philippines. The airline plans to begin with three aircraft, before expanding to 18 by 2015.