Dogfight over Jetstar's Hong Kong takeoff
A week after Cathay Pacific made a blistering attack on Jetstar's plans, Hong Kong Airlines and its sister carrier Hong Kong Express confirmed they have lodged filings opposing the budget airline's application for the right to start scheduled services.
"Any extra opposition would make it more difficult [for Jetstar Hong Kong]," said Andrew Orchard, an aviation analyst for CIMB in Hong Kong. "But Cathay would still be the one that the regulators would be most in contact with."
Unlike Cathay, Hong Kong Airlines and Hong Kong Express have not publicly detailed reasons for their opposition.
"We believe that the government will make the appropriate judgment based on the long-term development of the local aviation industry and the overall economic interests of Hong Kong," they said in a short statement.
Jetstar Hong Kong is a joint venture between Qantas, Shanghai-based China Eastern and, more recently, Shun Tak Holdings, the listed conglomerate founded by Macau gambling billionaire Stanley Ho.
The entry of a Jetstar offshoot to one of Asia's most valuable aviation hubs would pose the biggest challenge to Chinese-backed Hong Kong Express, which is in the process of reshaping itself into a low-cost airline.
Cathay has claimed that Jetstar Hong Kong will be in violation of the city's constitutional laws because its principal place of business is in Australia, even though it has a local shareholder and managers.
Hong Kong's flag carrier has also argued that the plan to set up operations is an attempt by a foreign carrier to gain access to the city's pool of air-traffic rights without a "fair exchange of value to Hong Kong".
Cathay subsidiary Dragonair has filed its own objection with Hong Kong's Air Transport Licensing Authority.
However, Jetstar Hong Kong chief executive Edward Lau has dismissed the claims that it is controlled by a foreign airline, and has reiterated that the airline is confident of gaining all regulatory approvals.
Qantas had originally targeted the middle of this year for the launch of the budget offshoot, but delays in gaining regulatory approval have meant it is unlikely to get off the ground until at least December.
Despite the growing opposition, Mr Orchard said he believed Jetstar Hong Kong would eventually win approval from regulators, although he admitted it might require changes to its plans to get it across the line.
Jetstar Hong Kong boosted its bargaining position last month when it named Pansy Ho, one of the richest women in Hong Kong and the daughter of Stanley, as its chairwoman.
Qantas, Shun Tak and China Eastern each own a third of Jetstar Hong Kong.
Frequently Asked Questions about this Article…
Jetstar Hong Kong is a proposed low-cost carrier set up to operate scheduled services from Hong Kong. It is a joint venture owned equally by Qantas, Shanghai-based China Eastern and Shun Tak Holdings, with each party holding a one-third stake.
Cathay Pacific has publicly challenged the bid, arguing Jetstar Hong Kong may breach Hong Kong’s constitutional laws because its principal place of business is in Australia and that a foreign carrier could gain access to air-traffic rights without a fair exchange of value. Hong Kong Airlines and Hong Kong Express have also lodged filings opposing the application, although they have not publicly detailed their reasons.
Yes. Dragonair, a Cathay subsidiary, has filed its own objection with Hong Kong’s Air Transport Licensing Authority opposing Jetstar Hong Kong’s application.
Regulatory opposition has already delayed plans. Qantas originally targeted a mid-year launch, but regulatory delays make a launch unlikely before at least December. Additional objections could make gaining approval more difficult and could force further changes to the plan.
Jetstar Hong Kong’s chief executive Edward Lau has dismissed claims that the carrier is controlled by a foreign airline and said the airline is confident it will gain all necessary regulatory approvals.
Pansy Ho, the daughter of Macau businessman Stanley Ho and one of Hong Kong’s wealthiest figures, was named chairwoman of Jetstar Hong Kong. Her appointment was described as boosting the venture’s bargaining position in Hong Kong.
The entry of a Jetstar offshoot into Hong Kong — one of Asia’s most valuable aviation hubs — would pose a significant competitive challenge, particularly to Hong Kong Express as it reshapes itself into a low-cost carrier.
Andrew Orchard, an aviation analyst at CIMB in Hong Kong, said more opposition would make the process harder but that Cathay would be the regulator’s main point of contact. He believes Jetstar Hong Kong would likely eventually win approval, though it might need to alter its plans to secure it.
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