Hong Kong “protectionism” was to blame for the decision to block Qantas’ bid to set up more flying operations for its budget subsidiary Jetstar Airways in the SAR, says the Australia-based airline’s chief executive.
Alan Joyce made the comments at an aviation summit in Sydney after Hong Kong rejected Jetstar’s bid for an operating licence on June 25.
The Air Transport Licensing Authority (ATLA) said Jetstar’s application was rejected because its principal place of business is not Hong Kong. Jetstar insisted that all Hong Kong operations would be managed independently of its main base in Melbourne, as the majority of its shareholders would be Hong Kong-based.
Speaking to the audience at the CAPA Australia Pacific Aviation Summit, Joyce hinted that Australia’s flagship carrier could walk away from plans to expand airline operations in Hong Kong, adding that one of the biggest threats to airlines operating in a global market was governments “penalising and taking away fair competition”.
“We had clearly made sure that [Jetstar] met all of the rules that apply in Hong Kong. If they applied to Cathay, Cathay would not be able to operate in Hong Kong today,” he said.
Joyce also hinted that there were double standards when the ATLA rejected Jetstar’s bid.
“There was blatant application of the rules for Jetstar Hong Kong that did not apply to other carriers,” he said.
“When different rules are applied to different carriers in different ways, that’s a distortion and shouldn’t be allowed,” he said.
Jetstar Hong Kong was founded in 2012 as a joint venture between the Qantas Group, China Eastern Airlines, and Shun Tak Holdings.
Jetstar submitted its application for an operating license in 2013, and a public inquiry into the application was held amid opposition from four local airlines: Cathay Pacific, Dragonair, Hong Kong Airlines, and Hong Kong Airways Express.
After a two-year wait and month-long public inquiry into the bid, Jetstar Hong Kong’s application was turned down. In the judgement, the panel said they did not feel Jetstar Hong Kong could “make its decisions independently from that of the two foreign shareholders.”
The operating licence would have allowed Jetstar to schedule more flights from Hong Kong to some of Asia’s most popular holiday destinations, including cities across China, South Korea, Japan, and the Philippines.
While the ATLA was considering Jetstar’s application, the airline was forced to sell some of its fleet. According to Australian Aviation, Jetstar sold eight of its nine A320 jetliners. The most recent sale took place in March, when two such aircrafts were sold to a Chinese company for USD83 million (HKD643 million).
Jetstar Airways was established in 2003 and flies to 35 different destinations.
HKFP has reached out to the ATLA for comment.
Update: A statement released by ATLA said: “In the case of handling the licence application of JHK, all procedures were completed in accordance with the provisions of the Regulations and the ATLA Procedural Guidelines, which are all publicly available documents. ATLA had also discussed with JHK and the objectors and sought their mutual agreement on the procedures for dealing with the objections and representations.”
“ATLA deals with all applications on the same basis and there is no question that ATLA will protect any of the incumbent licence holders by applying different sets of rules to incumbent licence holders and applicants or preventing new entrants from entering into the Hong Kong market. Furthermore, the status of the application (be it a new entrant or an existing licence holder) is not a factor for ATLA’s decision as to whether or not to grant a licence.”