Denial of Jetstar Hong Kong licence creates 'island of protectionism', says report
Rejection of Jetstar Hong Kong's licence application winds back the clock on liberalisation, says Centre for Aviation
The Hong Kong government's decision to prevent Jetstar Hong Kong from taking off as the city's fifth airline three years after it was formed has created "an island of protectionism in Asia", said the Centre for Aviation, an industry think tank.
The rejection of a licence application that "would have been approved without blinking in every other jurisdiction in Asia" ignored consumer welfare and "winds back the clock on liberalisation", said the Sydney-based company in a lengthy analysis issued after the ruling.
Even more worrying was the statement by the Air Transport Licensing Authority (Atla) that indicates more protectionism to come, author of the report, Hong Kong-based senior analyst Will Horton, told the South China Morning Post.
The authority's reasoning presented in its 153-page ruling reflects less of what is prevailing reality internationally and more of what Horton called "fear-mongering" lobbying by leading objector Cathay Pacific Airways. He said it was "exceptionally worrying" that the authority wrote: "International air traffic rights are normally exchanged between countries on a bilateral basis. For obvious reasons, countries are extremely reluctant to grant landing rights to foreign airlines as they have to protect the interests of their own national carriers."
The statement did not address open skies, "where countries allow each other unlimited access", Horton said. Neither do countries have to trade traffic rights on a one-for-one basis, and they frequently do not, he added. The authority also made no reference to public interest, which would have benefited from more competition.
"Hong Kong has been against open skies - it has not signed a treaty with the US, for example," he said. "Again and again it has been proven you do not need to protect a national carrier. In short, what is in the interest of the national carrier is seldom in the interest of the nation. Markets do not need and should not protect their national carriers, as Atla says," he said.