Three Jetstar A320s at Toulouse two years ago, ordered in optimistic times

Jetstar’s application to operate a Hong Kong subsidiary has been rejected by Hong Kong’s Air Transport Licensing Authority. It’s a serious blow to Qantas’s significant investments in setting up a network of low cost trans border Jetstar franchises in Asia.

The Jetstar venture, owned by a consortium comprising Qantas, China Eastern Airlines  and Shun Tak Holdings, had spent more than two years in its current form pursuing licensing approvals to operate as a scheduled low cost carrier based in Hong Kong.

It was originally intended to start operations in 2012, then 2013, and bought nine A320s that were in the main placed in storage at the Airbus complex in Toulouse in advance of gaining the necessary Hong Kong approvals, although at last report, this fleet had been sold down to a single jet.

According to Hong Kong media, the Hong Kong authority said Cathay Pacific Airways Ltd , Hong Kong Dragon Airlines Ltd, Hong Kong Airlines Ltd and Hong Kong Express Airways Ltd had objected to Jetstar’s application.

Having considered all relevant information and the objections presented at the public inquiry, the authority said it decided that JHK’s application be refused as JHK did not comply with the basic law of having its principal place of business in Hong Kong.

In a statement Jetstar Hong Kong’s chief executive officer Mr Edward Lau said he was ‘extremely disappointed by the decision.’

Mr Lau said “We will take time to review the decision and consider our next steps.”

The decision is an obvious setback to Qantas ambitions for an expanded trans border low cost Jetstar franchise throughout the eastern hemisphere. Qantas founded with Japanese partners the expanding yet loss making Jetstar Japan operation (which recently began international services to Hong Kong), has a small interest in Vietnam based Jetstar Pacific, and more than a year ago, paused expansion by Singapore based Jetstar Asia because of what was termed excessive capacity in the LCC sector in SE Asia.

Mr Lau said said “Jetstar Hong Kong’s principal place of business is Hong Kong.

“The carrier is chaired by Hong Kong business woman Ms Pansy Ho with a local CEO and management team.

“We intend to bring low fare options, a network from Hong Kong that Hong Kongers are missing out on and the opportunities of flying in high value visitors overnight from around the region that the travel trade industries should enjoy.”

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