Jetstar's Hong Kong launch delayed
Jetstar may have to wait until the end of the year to launch its new Hong Kong airline due to delays in gaining regulatory approval from authorities overseas.
It comes as competition over flights through China heats up, with the announcement by Qantas competitor China Southern airlines to offer stand-alone flights from Sydney to London at prices considerably lower than those available with Qantas, Jetstar's parent company.
Jetstar chief executive Jayne Hrdlicka told the American Chamber of Commerce that the launch of Jetstar Hong Kong, originally scheduled for the middle of the year, had been delayed after government changeovers in China and Hong Kong thwarted plans to grant operating licences.
"Those things make it more difficult for decisions to be made, while the new cabinets are getting set and people are applying policies and rethinking positions," she said.
Ms Hrdlicka said regulatory approval was now on a "clear path".
"We are very confident of being able to fly by the end of 2013."
Jetstar Hong Kong made its official pitch to gain an operating licence for the airline in July - four months after Jetstar's parent, Qantas, and joint venture partner China Eastern, unveiled plans for the new airline - in the form of an application for an air operator's licence for commercial flights.
Delays in the launch of the new airline give Jetstar competitors time to up the ante.
Although Jetstar Hong Kong has China Eastern lobbying on its behalf, the mainland airline has an opponent in Air China, which is a cornerstone shareholder in Cathay Pacific.
But Nomura Australia analyst David Fraser said local carriers would find it hard to rival.
"At the end of day, Jetstar's cost structure is going to make it very competitive for anyone else up there," he said.
Ms Hrdlicka said Jetstar would continue to bed down its existing operations throughout Asia, including Singapore and Vietnam, rather than expanding into new areas.
"We won't be adding any businesses to the portfolio for some time," she said.