Hong Kong Rejects Jetstar as New Local Carrier

27th Jun 2015

Qantas' budget subsidiary Jetstar waited nearly two years on its application to start a new local carrier in Hong Kong, but the decision city authorities came up with was certainly not a favorable one for the Australian carrier. Hong Kong rejected Jetstar's bid to start a local airline.

When explaining this decision, Hong Kong regulator said Jetstar's bid did not comply with the city's laws of having main offices in the Chinese territory.

In addition, the regulator also said that other carriers, such as Dragon Airlines and Cathay Pacific, have also objected to Jetstar's application.

Air Transport Licensing Authority said the following about its decision to reject e Jetstar:

"Jetstar Hong Kong cannot make its decisions independently from that of the two foreign shareholders."

Jetstar is a joint venture of Qantas, China Eastern and an investment company from Hong Kong, Shun Tak Holdings.

Qantas Disappointed at Decision

Qantas Chief Executive Officer Alan Joyce said ATLA's decision was disappointing for the shareholders and for the "travelers that Jetstar Hong Kong planned to serve".

In a statement issued today, Joyce said:

"It's the traveling public who have lost out, because the message from this decision is that Hong Kong appears closed to fresh aviation investment even when it is majority locally-owned and controlled."

Qantas CEO also said that, while other markets in Asia are "opening up" when it comes to aviation, Hong Kong is moving in opposite direction.

"Given the importance of aviation to global commerce, shutting the door to new competition can only serve the vested interest already installed in that market."

Qantas said it had not decided yet if it will appeal this decision, but it will reconsider basing Jetstar in Hong Kong.

According to Qantas Jetstar is currently valued at AUS$10 million.