Cathay Pacific

Jetstar Hong Kong not a genuine local carrier, says Cathay in bid to ground budget airline

Budget airline's application for services in the city is challenged on the ground that it violates the Basic Law and is not a genuine local carrier

PUBLISHED : Thursday, 05 September, 2013, 1:11pm
UPDATED : Friday, 06 September, 2013, 10:10am

In a fresh attempt to stop a budget airline from taking off in Hong Kong, Cathay Pacific Airways said yesterday that it has filed an objection to Jetstar Hong Kong's application to run scheduled services in the city on the ground that it violates the Basic Law and is not a genuine local carrier.

Founded by Qantas Airways and China Eastern Airlines last year, Jetstar Hong Kong has been burnishing its local credentials of late to pre-empt just this kind of resistance. In June, Shun Tak took a 33 per cent stake in Jetstar Hong Kong and its managing director, Pansy Ho Chiu-king, was last month appointed chairwoman of the planned budget airline.

Without naming Shun Tak, Cathay said that having a Hong Kong-based shareholder did "not determine management control or principal place of business under the Basic Law".

"Any local franchise operation has local managers. This does not stop it from being controlled from overseas. Management control of the Jetstar Hong Kong franchise clearly rests in Australia," Cathay said.

Management control of Jetstar Hong Kong clearly rests in Australia
Cathay Pacific 

Rejecting Cathay's assertion that Jetstar Hong Kong was controlled by a foreign airline, the budget carrier's chief executive Edward Lau said: "Jetstar Hong Kong is managed locally and we are confident of meeting all regulatory approvals, including principal place of business."

Dragonair, controlled by Cathay, also cast doubt on the Hong Kong International Airport's capacity to accommodate a new carrier.

"We do not believe that Jetstar's business model will make the best use of the remaining available slots at [the Hong Kong airport]. This is particularly important since the third runway at the airport, if approved, is not expected to be in operation before 2023," Dragonair said.

The Air Transport Licensing Authority (ATLA), part of the Transport and Housing Bureau, is responsible for granting licences for passenger airlines and freighters.

"The ATLA will consider applications for licences to operate scheduled air services and the related objections in accordance with the Air Transport (Licensing of Air Services) Regulations," a spokesman for the watchdog said.

In 2005, Cathay opposed the licence application by Oasis Hong Kong Airlines, saying the low-cost carrier had not obtained the required aircraft operator certificate. The ATLA rejected Cathay's objection.

And in 2002, before it took full ownership of Dragonair, Cathay engaged in a dogfight with Dragonair, trashing each other's licence applications.

Dragonair objected to Cathay's application to fly to three mainland cities while Cathay retaliated by opposing Dragonair's application for routes to five other Asian cities.