Cathay Pacific (CX) has filed a formal objection to the application by Jetstar Hong Kong for a licence to operate in Hong Kong.
Plans for the low-cost carrier to operate from Hong Kong have been in the works since 2012, when Qantas first announced the joint venture with China Eastern (see here). In June, Hong Kong-based Shun Tak Holdings also joined in and purchased a third of Jetstar Hong Kong’s shares for US$66 million (see here).
But CX contends that despite having a major local stakeholder onboard, Jetstar Hong Kong does not meet the conditions set out by the Basic Law, Hong Kong's mini-constitution, for locally licensed carriers.
“Management control of the Jetstar Hong Kong franchise clearly rests in Australia," the airline said in a released statement. "Our position that Jetstar Hong Kong does not meet the Basic Law requirement to have its principal place of business in Hong Kong is backed by strong legal advice.”
“Handing over Hong Kong’s air traffic rights to a carrier that is a franchise controlled by an Australian airline that itself can influence the Australian government’s negotiations with Hong Kong creates a clear conflict-of-interest where Hong Kong loses out.”
When approached for comments, Edward Lau, chief executive of Jetstar Hong Kong told Business Traveller: “As we have said previously, we don’t take anything for granted, however we are confident of meeting all regulatory approvals including [the issue of] principal place of business.”
Lau furthered that the company rejected any suggestion that Jetstar Hong Kong was controlled by a foreign airline. He said: “Jetstar Hong Kong is managed locally and we look forward to bringing low fares to the people of Hong Kong.”