Regional Round-Up
Government changing rules to favour JetStar Hong Kong?
November 1st 2014
Cathay Pacific Airways (CX) will not change its opposition to the establishment Jetstar Hong Kong said a senior executive last month. Cathay believes the proposed low-cost carrier (LCC) remains a “branch office of Qantas” and fails to meet the legal definition of a local entity needed to obtain an Air Operator’s Certificate (AOC). Read More »
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Speaking at a recent Sydney conference, the airline’s head of corporate development, James Barrington, said Hong Kong’s constitution clearly spells out that an airline had to have its principal place of business in Hong Kong in order to operate flights from there. “It looks to us that Jetstar doesn’t have its principal place of business in Hong Kong. It is a branch office of an Australian airline. All the legal advice taken has said it just doesn’t meet the requirements of the Basic Law,” Barrington said.
“A franchise operation of McDonald’s in Hong Kong with a 51% local partner is still McDonald’s based in North America,” he said. “A franchise operation of Qantas in Hong Kong, albeit with a majority local partner, is still a franchise operation.”
In October, Hong Kong’s Transport and Housing Bureau, which is in charge of designating local carrier status, issued a statement that said it had “fine-tuned” the framework of designation by spelling out the factors it now takes into account to also include “public interests”.
China Eastern Airlines (CEA), Qantas Airways and Shun Tak Holdings – a Hong Kong-based casino conglomerate – hold equal 33.33% equity in Jetstar Hong Kong, although Shun Tak’s voting rights have been increased to 51%. This change allows it to appoint four of the seven board members of the proposed LCC, thereby meeting the government’s requirement to be a “Hong Kong-controlled carrier”.
A source close to Jetstar told Hong Kong’s South China Morning Post it is unlikely it will be in business for the upcoming peak travel season.
