Qantas and China Eastern join forces with new Jetstar airline in Hong Kong

The new budget airline will be owned equally by Qantas and China Eastern and is due to launch in 2013.

Qantas and China Eastern join forces with new Jetstar airline in Hong Kong

Flying in and out of Hong Kong can be expensive compared to other South East Asian hubs such as Singapore or Indonesia, where budget airline competition has driven down fares.

But travellers looking for short-haul flights from Hong Kong will have cheaper options if Qantas and China Eastern’s plans to set up a low-cost joint venture in Hong Kong gains regulatory approval.

Qantas will use its budget offshoot Jetstar to launch the joint venture, ‘Jetstar Hong Kong’ with China Eastern, China’s second biggest airline by passenger numbers.

With a launch date set for 2013, Jetstar Hong Kong will serve short-haul routes in Asia – including to greater China, Japan, South Korea and South East Asia.

Fares will be around 50 percent cheaper than its ‘full service’ airline rivals, Jetstar group chief executive Bruce Buchanan said.

Qantas seeks growth in Asia

Qantas continues to be reliant on its Jetstar network of airlines to achieve growth for the group and help stem losses from Qantas’s International business.

Qantas wholly owns its Jetstar operations in Australia and New Zealand and has other joint ventures in Singapore (Jetstar Asia) and Vietnam (Jetstar Pacific).

In July, its next venture Jetstar Japan – a joint venture with Japan Airlines -will take to the skies with flights from Tokyo Narita.

Launching Jetstar Hong Hong in 2013 is part of a longer term goal for Qantas, which wants access to Chinese domestic routes.

Mainland China has not yet opened the airline market up to foreign airlines – but expanding into Hong Kong will give Qantas access to the growing middle classes and a burgeoning airline market.

Jetstar’s Buchanan highlighted the opportunities to tap into demand from Hong Kong and greater China: “Hong Kong is one of the Asia Pacific’s major travel hubs, with around 40 million passengers a year and a population base of around 7 million. Greater China has a travel market of almost 300 million passengers per annum, forecast to grow to 450 million by 2015.

The low-cost joint venture marks a change in direction for Qantas, which has pushed back plans announced last year to launch a premium airline in Asia after talks with Malaysian Airlines over a premium joint-venture Asian airline collapsed.

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