Hong Kong rejects Jetstar licence bid

Jetstar tail fin generic picture

THE Hong Kong government’s Air Transport Licensing Authority has refused Jetstar a license to operate in Hong Kong, prompting a review from Qantas and its partners.

Jetstar Hong Kong, a joint venture between Shun Tak Holdings, China Eastern Airlines and the Qantas Group, was announced in March 2012. Jetstar had planned to have a base of 18 aircraft flying to destinations within five hours of Hong Kong. Its license application has been under consideration for more than two years. It was opposed by competitors such as Cathay Pacific Airways on the grounds that Jetstar Hong Kong was a, “branch office of an Australian airlinem,” rather than a local enterprise.

Qantas has stressed, however, that each Jetstar partner holds a one-third economic share, while the Hong Kong-based Shun Tak Holdings has 51 per cent of the voting rights and ultimate control. Seventy per cent of the board is from Hong Kong.

“[Hong Kong] is closed to fresh aviation investment even when it is majority locally owned and controlled,” says Qantas Group chief executive officer, Alan Joyce, also describing the decision as “disappointing”. He adds that: “At a time when aviation markets across Asia are opening up, Hong Kong is going in the opposite direction.”