The creation of Jetstar Hong Kong, a new subsidiary of the Qantas Group does not please Oneworld partner Cathay Pacific. Will Jetstar be able to fly from 2013?
HONG KONG- Hong Kong is a step closer to having its own low fares airline, with the Air Operators Certificate (AOC) application for Jetstar Hong Kong being accepted by the Civil Aviation Department in mid July.
Jetstar Hong Kong was announced in March this year and is on track to start services during 2013, subject to regulatory approval. It will deliver fares an average of up to 50 per cent cheaper than existing full service options to a range of destinations including mainland China, Japan, South Korea and South East Asia. The fleet will consist initially of three Airbus A320.
Jetstar had previously advised the Civil Aviation Department of the intention to apply for an Air Operators Certificate for the local airline, which maps out how Jetstar Hong Kong will manage its engineering, ground operations, fleet and crewing.
A project team has been assembled and announcement of key positions – including a Hong Kong Chief Executive Officer, Chief Pilot and Head of Engineering – is expected shortly. Recruitment of the first wave of up to 100 pilots and cabin crew is expected to begin in coming months.
Jetstar Group CEO, Jayne Hrdlicka, said that lodging the AOC application was an important step to ultimately creating new travel demand for Hong Kong through lower fares. “From our experience in other markets like Japan, Singapore and Australia we know that introducing sustainably low fares means people travel more places, more often,” Ms Hrdlicka said.
“The reason low fares airlines are generally well-received in new markets is because of their ability to increase overall demand. In other words, rather than taking a share of the existing pie we make the pie bigger.
“We’ve had strong support from tourism operators who want to see lower fares and competition bring more visitors to Hong Kong, particularly in the price-sensitive leisure end of the market.”
Jetstar Hong Kong is anticipated to add billions of dollars a year in economic activity for the city, as well as several hundred skilled jobs, by the time it reaches 18 aircraft in 2015. This would be generated chiefly through tourist spending on hotels, shopping and leisure activities as well as spending on airline operations with local suppliers including ground handling and engineering.
Recent research showed that 70 per cent of Hong Kong residents believed airfares to-and-from the city were too expensive and 66 per cent agreed low cost carriers would benefit the local economy.
In addition to preparing the Air Operators Certificate, Jetstar Hong Kong has been in discussions with a range of potential partners, including airports and major tourist attractions.
However, during the recent IATA meeting in Beijing, Hong Kong’s home carrier Cathay Pacific indicated that it does not see favourably the arrival of the new subsidiary of Qantas and China Eastern. Cathay seems increasingly irritated by the fact that Australians are now seeking approval from Hong Kong civil aviation to be able to code share with other subsidiaries of the group. Qantas has already other subsidiaries in Singapore with Jetstar Asia, Jetstar Japan as well as in Vietnam with Jetstar Pacific. During IATA, John Slosar, Cathay Pacific CEO highlighted that it would compete aggressively against the new Qantas offshoot.
Luc Citrinot a French national is a freelance journalist and consultant in tourism and air transport with over 20 years experience. Based in Paris and Bangkok, he works for various travel and air transport trade publications in Europe and Asia.
