Dragonair and Cathay Pacific submit Jetstar objection

Cathay Pacific and Dragon Air have formerly objected to Jetstar Hong Kong’s application for a licence to operate.

The carrier’s both cite Article 134 of Hong Kong’s Basic Law which states that a business must have its principal place of business in Hong Kong.

The statement goes on to claim that Jetstar Hong Kong would be managed by Australia – through Jetstar in Australia or its parent, Qantas.

Cathay Pacific Airways is not against competition. We successfully compete with other airlines every day in Hong Kong and around the world.

It went on to say that: “The reality is that, by its own admission, Jetstar Hong Kong is a franchise of a foreign airline which is also controlled by that foreign airline.  The setting up of Jetstar Hong Kong is an attempt by a foreign carrier to gain access to Hong Kong’s pool of traffic rights without a fair exchange of value to Hong Kong.  This is against the principle of fairness and reciprocity and is not in the best interests of Hong Kong.”

Cathay Pacific also went on to mention an unnamed stakeholder who has Hong Kong residency – 33% shareholder Shun Tak – not having enough shares to determine management control.

“Cathay Pacific Airways is not against competition. We successfully compete with other airlines every day in Hong Kong and around the world. This includes the 107 other Hong Kong and foreign airlines serving Hong Kong, 17 of which call themselves low-cost carriers (LCCs). Cathay Pacific Airways supports increased choice for consumers in Hong Kong, including the set up of LCCs with their principal place of business in Hong Kong. However, such developments must abide by Hong Kong law and they must be in the best interests of the Hong Kong economy. The proposed set up of Jetstar Hong Kong does not fit either of these important criteria.

“This is not a simple matter of an airline seeking to establish operations in Hong Kong.  It is much more than that. At the heart of this issue is the question, “Why should Hong Kong allow a foreign carrier to violate both the letter and the spirit of the Basic Law and put important economic assets into the hands of a franchise controlled by a foreign airline and, in the process, create a clear conflict-of-interest in terms of air traffic rights negotiations between Hong Kong and Australia?” We believe that action would undermine the Hong Kong economy and weaken its overall competitiveness and that is why we object to this application.”