• Thu
  • Dec 25, 2014
  • Updated: 10:20am
BusinessCompanies
AVIATION

Jetstar Hong Kong chief Pansy Ho lets fly at budget airline’s opponents

Chairman of Hong Kong airline start-up dismisses concerns over foreign control of board as a bid by the established players to protect their turf

PUBLISHED : Thursday, 12 September, 2013, 12:00am
UPDATED : Thursday, 12 September, 2013, 9:56am

Budget airline start-up Jetstar Hong Kong chairman Pansy Ho Chiu-king yesterday hit back at its opponents, saying the city has room for low-cost carriers.

Speaking for the first time to the media since taking the job last month, Ho, who is Macau gaming tycoon Stanley Ho Hung-sun's daughter, said that a new budget airline would complement the existing services rather than result in "vicious competition".

The fewer the players, the easier it is for the existing operators to work out their numbers. But Hong Kong needs more players to balance the market, and we know how to manage capacity and efficiency
Jetstar Hong Kong chairman Pansy Ho Chiu-king

Her comments followed opposition last week from Cathay Pacific Airways and three other Hong Kong players - Dragonair, Hong Kong Airlines and Hong Kong Express Airways.

While some economists and academics have said more players in the market would be good news for consumers by way of more options with lower prices, some have warned that indiscriminate granting of licences would have far-reaching implications for the city's aviation sector and Hong Kong's clout in future negotiations over bilateral aviation rights with overseas markets.

"The fewer the players, the easier it is for the existing operators to work out their numbers," Ho said.

"But Hong Kong needs more players to balance the market, and we know how to manage capacity and efficiency."

She pointed out that Cathay's weekly promotion on air fares, or "fanfares", is glaring proof of the demand for discounted air tickets.

The Ho family's listed flagship Shun Tak Holdings spent US$66 million in June for a third of Jetstar Hong Kong, which is now split three ways between Shun Tak, Shanghai-based China Eastern Airlines and Qantas Airways of Australia.

Ho said the Jetstar board is composed of seven members, of whom five are Hong Kong permanent residents, including herself, and two mainlander representatives of China Eastern.

Ho trashed Cathay's argument against granting a licence to Jetstar on the grounds that Hong Kong-based shareholders would "not determine management control" and the city would not be the "principal place of business under the Basic Law" as Jetstar's management control would rest in Australia.

"It is inevitable an incumbent service provider will defend its interest, which was what we (Shun Tak) did when Macau opened the gaming market for foreign players about 10 years ago," Ho said. "But we faced the reality of change, and changed our stance."

She conceded that the opposition of existing players meant Jetstar's debut would be delayed for "a few months", from the original target of the end of this year.

Jetstar plans to offer services to destinations within five hours of Hong Kong such as Southeast Asia, Japan, South Korea and the mainland, with its new Airbus fleet of A320 aircraft once it obtains the licence. It aims to build up the fleet to 18 by 2015, according to Jetstar chief executive Edward Lau.

Analysts said if the Hong Kong government granted the licence to Jetstar, it would set a precedent by allowing a foreign airline with a local partner to operate as a city carrier.

"There is debate on the ownership and the control structure of Jetstar, which involves Qantas," said an aviation analyst who did not want to be identified. "Cathay and the Hong Kong government have reasons to question [a licence]."

According to Qantas' filings in June last year to Australia's anti-trust regulator, the Australian Competition and Consumer Commission, the airline sought approval for an agreement with Jetstar in the region, including Hong Kong, in "co-ordinating on all network, scheduling, pricing, marketing, purchasing, customer services and resourcing decisions". The agreement was approved in March and is valid until March 2018.

Since June, the Transport and Housing Bureau has been reviewing the rules for designated air carriers, and no application for new airlines will be processed until that review is completed, which would take a few more months. The Air Transport Licensing Authority, which is a part of the bureau, is responsible for granting licences for passenger airlines and freighters.

Analysts said Britain, the European Union, the United States and Australia had well-defined rules on principal place of business for air carriers and that Hong Kong should refer to the British regime, which is more relevant to the city.

Share

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive
 
 

 

10

This article is now closed to comments

asiaseen
Money and connections - what more do you need? :)
impala
The irony of Pansy Ho attacking Cathay for protecting its monopolistic turf.

I mean, she is right. But let's not forget that her own Shun Tak holdings, owner of both TurboJet and (formerly NW) First Ferry, profits very nicely from its monopoly on HK-Macau ferry routes. Maybe the Swires will give her a taste of that medicine and start a ferry service to Macau. I am all for it. Bring on some real competitive price wars in Hong Kong.
HK-Lover
I just wonder what qualifications and credentials Ms. Ho has to chair an airline ?
asiaseen
If it is landing:
(a) it has no flaps down
(b) it has an unusually high angle of attack
(c) it is already more than half-way down the runway judging by the location of the photograph.
denise2000
Dear jve,
Thank you for your view on Ms Ho's title and your support on SCMP. the following is a Jetstar announcement for your reference. Have a good day. cheers, Denise Tsang
****www.jetstar.com/mediacentre/latest-announcements/detail?Id=f5a9c898-f263-4d3f-b956-5fa915c36ae7&language=en
Jetstar Hong Kong has today announced changes to its board adding further local Hong Kong expertise and leadership. Ms Pansy Ho, Managing Director of Shun Tak Holding Limited and an equal third shareholder in Jetstar Hong Kong, has become the Chairman of Jetstar Hong Kong.
John Adams
AGREED 100% !
.
Bring on open competition on ALL fronts : "by land, by sea, by air "
John Adams
Hurray !
Go for it Ms Ho !
ads@FLEXquarters.com
that plane is landing - not taking off...
impala
Dear Denise, thank you for your reaction. I see you have good reason to pass the buck to the Jetstar PR department. Nevertheless, their usage of the title goes against modern language conventions. It would be tempting to jot it down to sheer ignorance, but perhaps we should discern some kind of post-feminist statement from Ms Ho in it. Perhaps a woman can now be a (chair)man, and JetStar will call also all its future cabin crew members 'air hostess' (or even stewardess), including the males fulfilling that job.
impala
Here we go again. Last week, the SCMP temporarily bombarded Ms Eri Kaneko to 'spokesman,' correcting this error on its website after some hours.

Now we learn that Ms Pansy Ho is 'chairman' of Jetstar HK. Either go for gender-specific chairman/chairwoman descriptions, or if you can't tell men and women apart, stick to the gender-neutral 'chairperson.' This is really Form 1 English lesson stuff.
 
 
 
 
 

Login

SCMP.com Account

or