Jetstar Hong Kong sells 3 aircraft as it awaits approval

New budget airline Jetstar Hong Kong said on Friday (Aug 22) it has sold a total of six of its aircraft because it is taking longer than expected to get a licence to operate. The airline, which is a joint venture between Australia's Qantas, China Eastern Airlines and Hong Kong-based Shun Tak Holdings applied for regulatory approval in 2012 in the southern Chinese city.

An airline will only be given a operation license if its principle place of business and centre of its decision-making is in Hong Kong, according to local laws. "Jetstar Hong Kong can confirm the sale of a further three aircraft, now a total of six Airbus 320s, with three remaining in the fleet for launch," the airline's chief executive officer Edward Lau told AFP in an email.

The airline sold three A320s this month, and three in April. "This has been an unfortunate but prudent business decision made by the Jetstar Hong Kong board as the regulatory approvals are taking longer than initially expected," Lau said, adding that the sale doesn't affect the firm's readiness once approval is given.

Lau said Jetstar is working "closely" with the government and is "confident of gaining all the necessary approvals". The catalogue price of the latest sale of three A320s this month is US$281.7 million (S$352 million), according to Dow Jones Newswires.

The regulatory approval for the airline has also faced opposition from the city's flag carrier Cathay Pacific, which says the airline is not based in Hong Kong. "The whole Jetstar network is part of an Australian entity and certainly can't pass the test of being principally based here in Hong Kong," Cathay's chairman John Slosar had said earlier this month, Dow Jones reported.

Qantas owns the Jetstar brand and has other joint ventures in Japan, Singapore and Vietnam. Shipping and property giant Shun Tak Holdings, founded by Hong Kong tycoon Stanley Ho, bought a third of Jetstar Hong Kong for US$66 million in June of last year, helping its bid to set up locally.

Hong Kong-listed Shun Tak is run by managing director Pansy Ho, daughter of Stanley, who is also a Macau casino mogul. The low-cost carrier plans to fly to destinations in China, Japan, South Korea and Southeast Asia.

SOURCE

Shun Tak Holdings buys a third of Jetstar Hong Kong

A firm founded by Macau casino tycoon Stanley Ho has paid US$66 million for a third of new budget airline Jetstar Hong Kong, Australia's Qantas said Thursday.

Shipping and property giant Shun Tak Holdings will hold an equal share in the low-cost carrier, a joint venture involving Qantas and China Eastern Airlines that plans launch this year flying to China, Japan, South Korea and Southeast Asia.

Qantas chief Alan Joyce said the transaction would see his airline reduce its investment from US$99 million so that all three entities had a third share, with Jetstar Hong Kong's market value unchanged at US$198 million.

"This adds to the strategic partnerships we have across Asia with companies that have chosen to invest in the Jetstar brand," said Joyce in a statement to the Australian stock market.

"There is clear potential for a local low-cost carrier in Hong Kong to stimulate new travel demand, particularly given the proximity to mainland China and the ability to connect with existing parts of the Jetstar network," he added. Qantas owns the Jetstar brand and has other joint ventures in Japan, Singapore and Vietnam.

The move will help Jetstar Hong Kong in its application for regulatory approval in the city, which has tough rules for foreign-owned firms looking to set up locally.

Hong Kong-listed Shun Tak Holdings is run by managing director Pansy Ho, daughter of Macau casino mogul Stanley.

SOURCE

This can only mean good news to the young branch of the Jetstar group. With the airline now partly owned by the local, it can now get permit to fly to different cities within China much easily. The Jetstar network is expanding very vastly, competition in the skies will be very strong.