Slow take-off for Jetstar HK

JETSTAR’S attempt to gain regulatory approval for its new airline in Hong Kong is likely to drag on for months, giving its competitors time to up the ante ahead of the planned launch in the middle of next year.

Jetstar Hong Kong made its official pitch to regulators in July – four months after Jetstar’s parent, Qantas, and joint venture partner China Eastern unveiled plans for the new airline – in the form of an application for an air operator’s certificate, or licence to operate commercial flights.

The airline’s backers will not say when they expect a response from Hong Kong’s Civil Aviation Department, but sources in China say the final decision will ultimately rest in Beijing and will take some time.

Although Jetstar Hong Kong has the advantage of China Eastern lobbying on its behalf, the mainland airline has a vociferous opponent in Air China, which is a cornerstone shareholder in Cathay Pacific.

An analyst at CIMB Securities in Hong Kong, Andrew Orchard, said he expected it to be a few more months before the regulators made a decision. ”It seems that, internally [at Jetstar] at least, they are fairly confident that it will go through.”

Jetstar Hong Kong faces competition from Cathay Pacific and other airlines in the region, as well as the challenge of operating at an airport that has not been set up for budget airlines.

China’s Spring Airlines has also raised the possibility of setting up an offshoot in Hong Kong.

Cathay Pacific has highlighted in regulatory filings that it is ”possible that conditions may be imposed on any approval given in Hong Kong” for the new competitor. Its short-haul offshoot, Dragonair, will spearhead the group’s counter-offensive.

Dragonair has added six Airbus planes to its fleet this year to meet the needs of its expanding network.

”We have added a total of eight destinations to our network this year, and more are coming up in early 2013, including Zhengzhou, China and Yangon, Myanmar,” a Dragonair spokesman said.

The Jetstar Group has a project team in place in Hong Kong, which is being led by Nick Rohrlach, an executive manager of strategy at the budget airline. It is well on the way to hiring the first batch of 50 pilots needed for the launch of Jetstar Hong Kong, and it recently began recruiting flight attendants.

China Eastern’s vice-president, Tang Bing, has been named chairman of Jetstar Hong Kong’s six-member board, which includes two Jetstar representatives in Jayne Hrdlicka and David Koczkar.

Jetstar Hong Kong will begin operations with three A320 aircraft, before expanding to a fleet of 18 within three years. It will initially fly to greater China, Japan, South Korea and south-east Asia.

The original release of this article first appeared on the website of Hangzhou Night Net.


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