Posted on: 26 March 2012 by Mark Howells
China Eastern Airlines and the Qantas Group (which owns the Jetstar Group) have announced an alliance to bring low fares to China with the creation of Jetstar Hong Kong.
Jetstar Hong Kong aims to combine the partners’ local knowledge, networks and successful low-cost business model delivering low fares on short-haul routes in Asia, including Greater China, Japan, South Korea and South East Asia. It will be the first low-fare airline based in Hong Kong.
Subject to regulatory approval Jetstar Hong Kong services will start in 2013 with a fleet of three Airbus A320s, growing to 18 A320s by 2015.
The new carrier is underpinned by capitalisation of up to $198 million. The shareholding percentage in Jetstar Hong Kong will be equally held by China Eastern Airlines and Qantas Group. The maximum exposure for each partner is $99 million over a three year period.
Chairman of China Eastern Airlines, Liu Shaoyong, said the airline was pleased to be extending its 20 year relationship with the Qantas Group. “We believe there are huge opportunities for the Jetstar low-fare model throughout Asia and are excited to be the first major Chinese carrier to bring this travel option to the region,” he remarked. “Jetstar Hong Kong’s low-fare model will enable people to fly more often for less and will help to stimulate the Hong Kong tourism industry and the broader economy."
Qantas Group CEO, Alan Joyce, said the new agreement would build a strong platform for accessing the world’s largest, fastest growing and most profitable aviation market. “We see tremendous potential for the Qantas Group in Asia and we’re looking forward to working more closely with China Eastern Airlines to deliver on it,” he commented. “Establishing Jetstar Hong Kong in the heart of Asia and on the doorstep of mainland China is a historic opportunity to continue the successful expansion of the Jetstar brand in this region.
“We know from our experience with Jetstar in Australia and in the setup of Jetstar Japan the benefits of both a premium and a low cost airline operating in the same market,” Joyce added. “This will also apply to Jetstar Hong Kong.”