Qantas boss defends plans for HK airline

Qantas chief executive Alan Joyce has brushed aside opposition to it setting up a budget airline in Hong Kong, describing the new offshoot as more local than the city's established airlines.

Cathay Pacific has mounted an aggressive lobbying campaign against Jetstar Hong Kong, claiming it will be managed and controlled by a foreign airline.

But Mr Joyce said the new airline would be "more Hong Kong" than the city's other airlines such as Cathay and Chinese-backed Hong Kong Airlines. He said its directors, management and a greater percentage of its shareholding would be drawn from the local community.

"How more Hong Kong do you need to be when you are more Hong Kong than the other airlines?" he said during an interview as Jetstar took delivery of its first 787 Dreamliner from Boeing in Seattle.

Jetstar Hong Kong is a joint venture between Qantas, Shanghai-based China Eastern and listed Hong Hong conglomerate Shun Tak.

Shun Tak bought a 33 per cent stake in June for $US66 million, increasing the likelihood of Jetstar Hong Kong gaining regulator approval.

Its managing director Pansy Ho also became Jetstar Hong Kong's chairwoman.

"Pansy is of the belief that we have a strong case [for regulatory approval], and Pansy is leading the charge on that," Mr Joyce said. "It will be great for the whole market."

Ms Ho is the daughter of Macau gambling tycoon Stanley Ho.

Jetstar is hopeful of gaining approval from Hong Kong's aviation regulators by the end of the year, but the budget airline's group CEO, Jayne Hrdlicka, conceded it was in the "hands of the regulator".

The original plan was for Jetstar Hong Kong to begin flying by the middle of this year using three A320 planes but the approval proved harder than envisaged.

"We are ready when the regulator is ready to go," Ms Hrdlicka said. "It is being managed very aggressively by Pansy and Ed [Lau, Jetstar Hong Kong CEO]."

She said the entry of a budget airline would expand the aviation market in Hong Kong, as it had in Japan, and existing airlines had nothing to fear.

Mr Joyce said the airline had flexibility if it took longer to gain approval because it could move aircraft around Jetstar's operations in Asia and Australia.

He described as a "red herring" suggestions that Jetstar Hong Kong would face big hurdles in gaining access to routes governed by bilateral air rights agreements.

Qantas has also announced a $12 million tourism marketing deal with Victoria, which takes the tie-ups it has signed with five states and territories to $72 million over three years.

The reporter travelled to Seattle courtesy of Jetstar and Qantas.