Newly announced low-cost carrier Jetstar Hong Kong, a joint venture between Qantas and China Eastern Airlines, is to complement and support Jetstar Japan, a partnership between the Australian flag carrier, Japan Airlines (JAL) and Mitsubishi Corporation scheduled to commence operations later this year (see story here).
As reported earlier (see story here), Jetstar Hong Kong is expected to service primarily north Asian destinations such as key second-tier cities across Mainland China as well as Japan and South Korea. It will also fly to a number of Southeast Asian destinations. When announcing the new Hong Kong-based low-cost carrier at a press conference earlier today (March 26), Jetsar chief executive Bruce Buchanan dismissed suggestions that the venture would cannibalise the Japan project.
“You have to remember the size of the market in China, where the penetration rate for low-cost carriers is less than five per cent, compared to about 30 to 50 per cent in other parts of the world. There are currently 300 million middle class people in China, which will go up to 700 million by the end of this decade,” Buchanan said. A broader network will not only meet existing demand, he added, but stimulate a new market niche. He went on to cite the example of Ningbo to Tokyo as a possible route for the new airline, as opposed to flying from the usual hubs of Shanghai or Beijing.
The new carrier is expected to begin services by mid-2013 with an initial fleet of three Airbus A320s, which will eventually grow to 18 aircraft by the end of 2015. The launch route and destinations of Jetstar Hong Kong have not yet been announced.
With Qantas’ financial losses and weakened market position, Jetstar seems to be the group’s saving grace as it continues to do well and expand in the region with its three arms – Jetstar Airways, Jetstar Asia and Jetstar Pacific Vietnam. In fact, with its Asian premium carrier project being put on the backburner (see story here), Qantas might prefer to focus its resources on setting up these joint ventures in the low-cost market segment for the time being.
For more information, visit www.jetstar.com
Alisha Haridasani
