Hong Kong spells out status rules for airlines

The government has finally given a clearer definition of what it means to be a "Hong Kong carrier", which may put an end to proposed budget carrier Jetstar Hong Kong's two-year wait for approval owing to objections on those grounds.

The lack of a clear framework to determine the seemingly simple question of whether a carrier is a Hong Kong one or not has been at the crux of a prolonged debate over the legality of Jetstar, originally a joint venture between China Eastern Airlines Corp and Australia's Qantas Airways before Shun Tak Holdings became an equal shareholder in June last year.

The Basic Law requires airlines that want to establish in Hong Kong to prove they have their "principal place of business" in the city but does not elaborate on the criteria.

The Transport and Housing Bureau, which is in charge of designating the local carrier status, wrote in an emailed response to the South China Morning Post's inquiry that a 10-month review completed in April had "fine-tuned" the framework of designation by spelling out the factors it takes into account, which now also include "public interests".

"Factors such as ultimate management and control of the business, the relationship between the applicant and other foreign airlines, the place where the major operations of the airlines' business is conducted would be relevant. It has also been stipulated clearly in the revised guidelines that public interests will be taken into account when considering whether an airline should be designated," the statement said.

It added that airlines already designated also had to demonstrate their compliance with the requirement on a continuing basis.