HK rejects Jetstar JV bid

[cosi]

Hong Kong regulators have rejected an application for a budget airline joint venture involving Australia's Qantas and China Eastern Airlines, saying it could not be considered a local carrier.

Two years after Jetstar Hong Kong applied for the airline licence, the southern Chinese city's Air Transport Licensing Authority denied the start-up's application, saying on Thursday its majority foreign ownership meant its main place of business was not in Hong Kong.

Under Hong Kong's mini-constitution, the Basic Law, which came into force after China took back control of the city from Britain in 1997, airlines operating out of Hong Kong are required to have their "principal place of business" in the city.

In a 150-page ruling, a five-member panel said it "is of the view that JHK cannot make its decisions independently from that of the two foreign shareholders."

Qantas Airways Ltd, Shanghai-Based China Eastern Airlines Corp and local partner Shun Tak Holdings Ltd each own a third of the $US198 million ($A257.14 million) venture. Shun Tak joined the venture about a year after it was first announced in an attempt to win regulatory approval.

The licensing authority held an inquiry earlier this year into the application after Cathay Pacific Airways, Dragonair and Hong Kong Airlines objected to the application.

Qantas' Jetstar brand also operates in Singapore, Vietnam and Japan. Jetstar Hong Kong had planned to fly short-haul routes to mainland China, Japan, South Korea and Southeast Asia to capitalise on rising numbers of Chinese travellers, including tens of millions that pass through Hong Kong each year.

www.theaustralian.com.au/business/latest/hk-rejects-jetstar-jv-bid/story-e6frg90f-1227415365200

Cookies must be enabled. | The Australian

 

[Isochronous]

What a surprise (/sarcasm)

 

[yohy?!]

Disappointing to continually see corruption like this eating away at HK.

They should move the operation to SZX, at the right price they could still get the punters in and likely get better slot times too.

 

[kevrosmith]

Disappointing to continually see corruption like this eating away at HK.

They should move the operation to SZX, at the right price they could still get the punters in and likely get better slot times too.

By "right price", do you mean airfares, or the price of bribery they'd have to pay? :shock:

 

[yohy?!]

By "right price", do you mean airfares, or the price of bribery they'd have to pay? :shock:

Airfares

People from Hk already make the trip across the border for flights when the price is right

 

[kamchatsky]

Airfares

People from Hk already make the trip across the border for flights when the price is right

The price has to be REALLY CHEAP for most HKers to cross the border to fly. It is just so much hassle crossing the China border.

 

[Isochronous]

Disappointing to continually see corruption like this eating away at HK.

They should move the operation to SZX, at the right price they could still get the punters in and likely get better slot times too.

Sir John Cowperthwaite would be devastated by the lack of positive non-interventionism on this one.

 

[moa999]

The price has to be REALLY CHEAP for most HKers to cross the border to fly. It is just so much hassle crossing the China border.

By road yes.. But the completion of the express rail link from West Kowloon (I think now scheduled for 2018) may make things much easier.
The existing trains from Hung Hom are a bit of a pain (and slower)

 

[kamchatsky]

By road yes.. But the completion of the express rail link from West Kowloon (I think now scheduled for 2018) may make things much easier.
The existing trains from Hung Hom are a bit of a pain (and slower)

Are you talking about CRH? I don't think CRH stops over at Shenzhen Airport at all. So people still need to change at Shenzhen.

 

[moa999]

Are you talking about CRH? I don't think CRH stops over at Shenzhen Airport at all. So people still need to change at Shenzhen.

Yes. But it will make getting out of HK so much easier

 

[kamchatsky]

Yes. But it will make getting out of HK so much easier

CRH from HK to rest of China does have benefits. However the cost of building it is huge.

For transfers to SZX, CRH maybe good for tourists hanging around TST and Mongkok area, yes. But not for most HKers who are not living in the vicinity. Remember there are a lot of buses serving from all over HK to HKG. It is much more painful to do it via Shenzhen especially with another border crossing and also high level of theft crime in Shenzhen subways.

I personally wouldn't do it.

 

[A330]

Airfares

People from Hk already make the trip across the border for flights when the price is right

Macau airport struggled to attract much HK traffic even with lower fares. Shenzhen is much further so I don't see it working there either.

 

[Pleb Status]

Jetstar HK was never going to be a 'real' HK airline. It was always going to be run from Australia. JQ management openly admitted the fact until they knew they were in trouble getting approval.

Jetstar Asia is supposed to be a SIN airline but does anybody really think the 'controlling' SIN shareholder can overrule JQ/QF?

The actual ruling is in the link below -

http://www.thb.gov.hk/eng/boards/transport/air/Summary of decision (Eng) 25062015.pdf

 

[eastwest101]

Other people are saying this could be a blessing in disguise for Qantas. Comments along the line of at least everyone knows that Hong Kong is now closed for business and there is no point persisting with the current JQ HK plan. Will free up management time, aircraft, experience and funds to think about doing other stuff within the Qantas Group, whether thats closer ties with various Chinese Airlines and/or may allow QF and CX to start co-operating again.

Was interesting to hear that China Eastern are going ahead with their own LCC and see how that goes.

Lots of things to consider with this deal, especially as CX are at the limit of capacity for flights between Australia and Hong Kong. Plus the whole mainland China and Hong Kong political situation to consider.

 

[MEL_Traveller]

Disappointing to continually see corruption like this eating away at HK.

What corruption? Seems like a reasonable decision given the stated law.

 

[yohy?!]

What corruption?

Another HK airline who shall remain nameless likely causing the approval process to be dragged out years with documented cases of said airline lobbying HK politicians with gratis premium travel,

in the meantime HK Airlines receives a license and also decides to complain when they are clearly a mainland controlled carrier also...

On another point, the test for HK gov policy is always "what would SIN do?" - ie it's very rare for them to make policy decisions that favour protectionism over market economics.

 

[MEL_Traveller]

Another HK airline who shall remain nameless likely causing the approval process to be dragged out years with documented cases of said airline lobbying HK politicians with gratis premium travel,

in the meantime HK Airlines receives a license and also decides to complain when they are clearly a mainland controlled carrier also...

The concerns over ownership and control were reported by the media going back to 2013. So Jetstar should have had a pretty good idea going back at least that far. I don't see that as 'dragging out' an approvals process - it seems unlikely for it to be approved anyway. If the decision had come back to allow operations that might have been a different story... the significant losses during the delay might have warranted an investigation.

 

[moa999]

And it should be mentioned that of the other two HK airlines - one is majority British and Chinese controlled, and the other is Chinese controlled

 

[Scr77]

Plans for Jetstar Hong Kong are knocked back by local authorities.

Qantas plan for Jetstar Hong Kong is grounded

Still can't belive we can't fly direct to Beijing with an Australian Carrier.

 

[samh004]

Re: Jetstar Hong Kong Grounded

As I posted elsewhere, it's a shame the Australian regulators who approve landing rights and what not can't help a local business out and pull a few slots from CX... I get that QF/JQ aren't exactly small players who need help from big brother, but seeing as CX has obviously been so successful in lobbying the local HK government to reject JQ HK, if the same was true here of CX flights they might decide to back off a little bit.

I get that the premise is different, one is starting a local carrier, the other would simply be flying into this country. But if they can so obviously abuse their governments power to block competition, Australia really should get in on that act to show them that's all really isn't fair in love and war!