Jetstar Hong Kong confident its application to fly will take off

IT has been a long wait for Jetstar Hong Kong since its application, (See Jetstar Hong Kong’s long and costly wait to fly, Nov 21, 2014). Almost two years after its launch, the airline has yet to receive approval from the Hong Hong Kong authorities to fly. But Jetstar HK chief executive officer Edward Lau is confident that the approval will come eventually, now that the partnership has been expanded to include local conglomerate Shun Tak with its managing director Pansy Ho appointed to the chair. Jetstar HK was originally a partnership between Qantas and China Eastern Airlines. The question remains: When?

Courtesy Jetstar Hong Kong

Courtesy Jetstar Hong Kong

In an exclusive interview with Aspire Aviation, Mr Lau said Jetstar HK has been in close dialogue with the regulators. Asked about the objection by Hong Kong airlines, particularly Cathay Pacific, which is a full-service carrier while Jetstar HK is a budget operator, Mr Lau said this was expected “as we propose to bring a very competitive offering to the table.” He added: “Before the announcement of Jetstar Hong Kong’s arrival in March 2012, the existing Hong Kong airlines had no incentives to lower fares or offer low fare options to the Hong Kong travellers. Our arrival forces airlines already in Hong Kong to be more competitive.”

Central to the argument is how Jetstar HK’s entry would benefit the consumer. “The people of Hong Kong deserve a choice,” said Mr Lau, refuting Cathay’s insistence that Hong Kong does not have a market for budget travel. He countered:  “The average global LCC penetration rate is now claiming 27% and growing while in Hong Kong, low cost carriers account for only 8% of travel. There is much room for LCC to grow in Hong Kong.”

The comparison with other Asian markets, particularly Singapore, is inevitable. Mr Lau said: “Hong Kong has a population of 7 million and unlike other major Asian hubs like Singapore and Japan, does not have its own LCC. We see a great opportunity to bring the low fares revolution to Hong Kong. Singapore has a smaller population but has three local LCCs (Jetstar Asia, Tiger and Scoot). The airlines are successful and growing, alongside a large Full Service Airline and its regional subsidiary (Singapore Airlines/SilkAir). There is no reason why that shouldn’t also happen here in Hong Kong.”

So, granted the approval, what are Jetstar HK’s operating plans? Consumers can look forward to flying the airline’s short haul services to destinations within five hours of Hong Kong, in Southeast Asia, Japan, South Korea and Greater China. Jetstar Hong Kong will operate a fleet of Airbus A320-200 aircraft, configured for 180 passengers in a single class. Mr Lau said the carrier plans to grow to a fleet of 18 aircraft.

You can read the full text of my interview of Jetstar HK CEO Edward Lau on aspireaviation.com.

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About David Leo
David Leo has more than 30 years of aviation experience, having served in senior management in one of the world's best airlines and airports. He continues to maintain a keen interest in the business, writes freelance and provides consultancy services in the field.

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