The long saga of Jetstar’s attempts to run a Hong Kong subsidiary received another blow on Friday when the application was rejected by Hong Kong’s Air Transport Licensing Authority.
Striking a more positive note for the Qantas Group on the same day, Qantas reminded customers in Perth and Singapore that they can once again enjoy direct flights between the two cities, with the Qantas service having resumed from Friday, using a B737.
The airline has resurrected the service it axed last May, which used an A330.
The Jetstar Hong Kong rejection deals a blow to Qantas investment in setting up a network of low-cost Jetstar franchises in Asia.
The Jetstar venture (owned by a consortium comprising Qantas, China Eastern Airlines and Shun Tak Holdings) originally wanted to start operations in 2012 and bought nine A320s for the purpose. Most have long since been sold. China, of which Hong Kong is a special administrative region, is playing hardball, knowing that the ball is in its court. It can wait as long as it wants.
A Qantas statement said Qantas and its fellow shareholders in Jetstar Hong Kong would now “review the enterprise”, following the authority’s decision to reject the local carrier’s application to establish an operation in Hong Kong.
Each partner in Jetstar Hong Kong holds a one-third economic share while the Hong Kong based Shun Tak Holdings has 51% of the voting rights and ultimate control. Seventy per cent of the board is from Hong Kong.
At 31 December 2014, the Qantas Group investment in Jetstar Hong Kong was carried at AUD 10 million.
The low-cost carrier’s application for a licence to operate scheduled air services has been under consideration by the local licensing authority for over two years.
Expressing disappointment at the decision, Qantas Group chief executive Alan Joyce, a strong proponent of the wannabe Hong Kong airline, said: “This is as disappointing for the shareholders as it is for the travellers that Jetstar Hong Kong planned to serve.
“It’s the travelling 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. At a time when aviation markets across Asia are opening up, Hong Kong is going in the opposite direction.”
The decision would “only serve the vested interests already installed in that market”, Joyce added.
Cathay Pacific and its offshoot Hong Kong Dragon Airlines had lodged formal objections to Jetstar Hong Kong, viewing the carrier as a Qantas front and protesting that the new operation “does not have its principal place of business” in Hong Kong.
Back on the full-service front, QF71 departed Friday afternoon from Perth bound for Singapore, one of five return services that Qantas will operate on the route each week using B737 aircraft. With a flying time of just over 5 hours, the flight is scheduled to land at 5.20pm.
“Our customers told us they missed us – so with the right strategy and the right aircraft on the right route, we’ve come back to meet that demand,” Qantas International chief executive Gareth Evans said.
The service had seen a “fantastic response” with the early evening arrival into Singapore allowing excellent connections to the rest of Asia with Qantas airline partners, Evans added. Koh Samui, Phuket and Tokyo are among the most popular connection choices.
Edited by Peter Needham