Sydscott
Posts: 3450
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RE: Qantas And China Eastern To Launch Jetstar HK

Mon Mar 26, 2012 9:40 pm

Quoting koruman (Reply 40):
I love the picture of the circles showing Jetstar's Asian dominance. Footprint even.

Jetstar Pacific is a basketcase and has been converted into a de facto division of Vietnam Airlines.

Jetstar Asia is just about solvent.

Jetstar Hong Kong will have three aircraft and maximum capital of $99 million over three years.

This start-up does not even represent a toe in the water. It's a miniscule start-up as part of a brand which hasn't got significant market share anywhere outside Australia.

Jetstar Pacific, and it's status as a division of Vietnam Airlines certainly presents some opportunities for QF to participate in the growth of the Vietnamese market. Don't forget it's planned to grow to 15 A320's.

Jetstar Asia, is not supposedly cash flow positive and profitable. That's a pretty good out come in what is a very competitive market and is a testament to the Singaporean Management of JQ Asia.

So sure the Jetstar brand doesn't have significant market share outside of Australia yet, but then you wouldn't expect it to. With Jetstar Japan in the building phases, and no doubt it has Korea, China, Phillipines, Taiwan etc on the radar, Jetstar Pacific on the mend, Jetsta Asia profitable and growing and a strong position in Australia and New Zealand the QF strategy of having Jetstar circle the Asia Pacific to grow the LCC market appears to be coming t fruition.

Quoting qf002 (Reply 44):
But then, CX doesn't cooperate with anybody in OW. BA, AA, JL must all be pretty frustrated at times, but such a big Asian airline is too valuable for the alliance for anyone to suggest booting CX out.

It was said that the only reason CX joined OW was the feed that AA gives them. It certainly wasn't for co-operating with QF and BA!

Also QFs co-operation with Vietnam Airlines and now China Eastern Airlines presents some interesting opportunities. Lets say OW could move Malaysian Airlines, Vietnam Airlines and China Eastern Airlines into the OW sphere of influence. In that scenario who needs CX in OW? CX could easily then move from OW to Star without a problem. Then what happens to the Skyteam Alliance? Well SQ doesn't really co-operate with anyone in Star so if it was to move from Star to Skyteam that would certainly be interesting. It presents some pretty interesting alliance re-alignment thoughts.

Quoting qf002 (Reply 44):
They have added masses of capacity, most of it at QF's detriment, over the past decade. They've stepped on QF's toes by flying to cities like CNS and ADL which are generally serviced by OW partners via a QF domestic codeshare.

Actually under the current bilateral, CX and other Hong Kong Airlines are at maximum frequencies. They can't add any more unless they want to use bigger planes. The Australian and Hong Kong Government have been in negotiations about an expanded air services treaty but last year those negotiations broke down. In a nutshell the Hong Kong Government wants more capacity for CX and to allow Hong Kong Airlines to start routes to Australia. In return the Australian Government, on behalf of Qantas, has asked for expanded beyond rights through Hong Kong. The Hong Kong Government has said a flat "no" to that so the talks broke down. It is expected that negotiations will resume this year but I wouldn't expect them to get very far again.
 
delimit
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RE: Qantas And China Eastern To Launch Jetstar HK

Mon Mar 26, 2012 11:34 pm

I would rate the chance of QF leaving OW higher than MU leaving ST. Not that I think either is likely, of course, but OW has already actively courted MU. They then surprised everyone on the board and announced ST.

The JetStar carriers do seem to like doing deals with ST members. Indonesia coming next?

Also, while relations between CX and QF may barely be cordial; it's true love compared to how either of them feel about SQ.

[Edited 2012-03-26 16:37:04]
 
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zeke
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RE: Qantas And China Eastern To Launch Jetstar HK

Mon Mar 26, 2012 11:56 pm

Quoting qf002 (Reply 46):
So CX is therefore the third largest foreign carrier in Australia by total seats (by my very rough calculations, NZ would be a few hundred behind CX)?

No, 4th. NZ has around 10,000 more seats a week.

SQ and EK each have around 9% of the market, NZ, VA, JQ each have around 8%, and CX is back at 5%. QF is around 18%.

Quoting qf002 (Reply 46):
This might well be the case, but CX has far outgrown QF in the market since Oneworld was formed -- CX has managed to grab most of that market growth.

As I said above, CX has been sitting on 4-5% of the market for a long time, I think as long oneworld as been around. The suggestion that CX has expanded in Australia to the detriment of QF is not supported by the statics. The big changes in the international market over the last 10 years is with EK, VA, and JQ which combined represents around 25% of the market, these were small players, or non existent 10 years ago.
Human rights lawyers are "ambulance chasers of the very worst kind.'" - Sky News
 
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RyanairGuru
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RE: Qantas And China Eastern To Launch Jetstar HK

Mon Mar 26, 2012 11:57 pm

Quoting Delimit (Reply 51):
Indonesia coming next?

I know you were joking, but I wouldn't fall over with shock if you were right!

Quoting Delimit (Reply 51):
while relations between CX and QF may barely be cordial; it's true love compared to how either of them feel about SQ.

  
Worked Hard, Flew Right
 
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allrite
Posts: 2583
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RE: Qantas And China Eastern To Launch Jetstar HK

Tue Mar 27, 2012 12:34 am

Potential legal/constitutional barriers to the Jetstar Hong Kong ownership structure?

Quote:
When Hong Kong moved from British to Chinese sovereignty in 1997 it developed a then unique formula to protect its autonomy in aviation matters. When Australia negotiates a bilateral air services agreement with another country it typically agrees that only airlines owned and controlled by Australian nationals will be allowed to exercise the Australian set of traffic rights that exist under it, ie who flies where and when. Hong Kong has no nationals as such so it uses the formula of Incorporation and Principal Place of Business (IPPB) to determine which airlines should qualify to use those rights – and there is no way in which an airline carrying an Australian branding and controlled in effect from Sydney and from Shanghai can be said to have its principal place of business in Hong Kong.

"It's the Constitution, it's Mabo, it's justice, it's law, it's the vibe." Okay, no Mabo in this one...

[Edited 2012-03-26 18:14:31]
I like artificial banana essence!
 
Sydscott
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RE: Qantas And China Eastern To Launch Jetstar HK

Tue Mar 27, 2012 1:19 am

Quoting Delimit (Reply 51):
I would rate the chance of QF leaving OW higher than MU leaving ST.

QF will go where BA, AA and LAN go. That's OW so there is no chance of QF changing.

Quoting Delimit (Reply 51):
Also, while relations between CX and QF may barely be cordial; it's true love compared to how either of them feel about SQ.

I don't know. As a general rule it would appear the QF knows how to play the game in Singapore so it is reasonable to expect that any commercial transaction between the two would be done with a good deal of knowledge about the other. I think that as much as QF and SQ complete both of them know the other and know the need each other. If they could combine to squash EK then that represents much more of an opportunity than squashing CX does.

The question for SQ is why are they in Star? They don't really co-operate with anyone and have been determined to build their own global presence using their own aircraft in much the same way EK has. (And much the same way CX has). Indeed it can be argued that airlines from these 3 City States, EK, SQ and CX, without domestic feed of their own, have been quite successful in building substantial global networks on their own without needing alliance co-operation.
 
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zeke
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RE: Qantas And China Eastern To Launch Jetstar HK

Tue Mar 27, 2012 1:25 am

Quoting allrite (Reply 54):

It is more than just ownership, one can setup a company in HKG very cheaply, a lot of global companies already have local subsidiaries. The test in HKG is not the ownership, it is the place where business is controlled. The local tax office then says, well if it is being controlled in HKG, then tax is payable in HKG.

This sounds reasonable ? A CX pilot that is based in Australia, lives in Australia, employed by an Australian subsidiary of CX, pays full Australian tax, CX pays Australian payroll tax, they are subject to Australian workplace relations laws. They also have to pay full HKG tax, as they work for a company that is controlled from HKG, despite not living in HKG, or being employed by a HKG company.

I also like the comment in the article " it all sounds good – Hong Kong has a huge, relatively new, airport to fill", HKG is already at capacity at various times of the day, hence the reason for he 3rd runway recently being approved.
Human rights lawyers are "ambulance chasers of the very worst kind.'" - Sky News
 
ABpositive
Posts: 180
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RE: Qantas And China Eastern To Launch Jetstar HK

Thu Mar 29, 2012 3:29 am

Quoting allrite (Reply 39):
Quoting EK413 (Reply 37):
With a 49% stake is this enough to restructure FJ...?

I doubt that FJ are free of political interference, whatever the financial breakdown.

A law has just been passed in Fiji blocking QF from any decision making, even though they have 49% stake in FJ.

http://www.theage.com.au/business/fi...qantas-control-20120328-1vypn.html
 
aerohottie
Posts: 818
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RE: Qantas And China Eastern To Launch Jetstar HK

Thu Mar 29, 2012 4:03 am

Quoting ABpositive (Reply 57):
A law has just been passed in Fiji blocking QF from any decision making, even though they have 49% stake in FJ.

http://www.theage.com.au/business/fi....html

Maybe its time for some diplomatic retaliation from Australia and New Zealand (who collectively account for almost 50% of Fiji's foreign trade, and almost 70% of the tourism sector).
What?
 
YLWbased
Posts: 895
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RE: Qantas And China Eastern To Launch Jetstar HK

Thu Mar 29, 2012 6:25 am

HKG is surrounded by LCC hubs - MNL, CEB, HAN, TPE, KUL just to name a few, with HKG exception high operating cost, I wonder how can Jetstar Hong Kong compete against the other players in the region where they enjoy a much lower cost on everything.

A List of LCC that currectly operates to HKG:

Air Asia - Kota Kinabalu, Kuala Lumpur, Penang, Phuket, Bangkok, Medan
SEAIR - Clark
Tiger Airways - Singapore
Cebu Pacific - Manila, Clark, Kalibo, Cebu
Airphil Express - Cebu
Jetstar Asia - Singapore
Spring Airlines - Shanghai
Juneyao Airlines - Shanghai
Jeju Air - Seoul, Busan, Jeju
Orient Thai - Bangkok
Air Busan - Busan
Bangkok Airways - Koh Samui
Jin Air - Seoul
Peach - Osaka Kansai (Begin July 1)

A list of foreign airlines that oeprates 5th freedom flights in and out of HKG on a close to LCC price:

Delta - Tokyo Narita
United - Tokyo Narita, Singapore, Ho Chi Minh City
Royal Jordanian - Bangkok
Air India - Osaka Kansai, Seoul

YLWbased
Hong Kong is not China. Not better or worse, just different.
 
YLWbased
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RE: Qantas And China Eastern To Launch Jetstar HK

Thu Mar 29, 2012 6:31 am

A map of all LCC destination from HKG:

Big version: Width: 540 Height: 540 File size: 69kb


[Edited 2012-03-28 23:32:31]
Hong Kong is not China. Not better or worse, just different.
 
YLWbased
Posts: 895
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RE: Qantas And China Eastern To Launch Jetstar HK

Thu Mar 29, 2012 6:42 am

Major LCC Bases around HKG in Asia:



edit: spelling

[Edited 2012-03-28 23:43:34]
Hong Kong is not China. Not better or worse, just different.
 
cchan
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RE: Qantas And China Eastern To Launch Jetstar HK

Thu Mar 29, 2012 8:56 am

Quoting YLWbased (Reply 59):
I wonder how can Jetstar Hong Kong compete against the other players in the region where they enjoy a much lower cost on everything.

Depends on what market they are going to serve. With the assistance of MU, if they get HKG-China rights, they have very good chance to be successful. My suspicion is that they will mainly target the HKG-China market, hence they need MU partnership.
 
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huaiwei
Posts: 354
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RE: Qantas And China Eastern To Launch Jetstar HK

Thu Mar 29, 2012 12:55 pm

Quoting wowpeter (Reply 38):
QF is hoping that they can play the same card that they have play in Singapore and thus partially kills CX profits like what they have done to SQ profits at the moment

QF killing SQ's profits? Where did you get that kind of info? The reverse is probably more true, and last I checked, the Oceanian market has been one of the bigger money earners for SQ as a whole even in the midst of the financial crisis.

What really damaged SQ's profits is a combination of fuel prices and competition from three major LCCs. Basing one LCC in HKG is not going to kill CX, considering they are already happily surviving despite a whole host of LCCs there as well illustrated by YLWbased, plus the threat of LCCs basing themselves in Macau which has not exactly been too successful.
It's huaiwei...not huawei. I have nothing to do with the PRC! :)
 
PezySPU
Posts: 281
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RE: Qantas And China Eastern To Launch Jetstar HK

Thu Mar 29, 2012 6:39 pm

Quoting YLWbased (Reply 59):
I wonder how can Jetstar Hong Kong compete against the other players in the region where they enjoy a much lower cost on everything.

Absolutely correct, I also have my doubts about this venture. However, do note that primary market of this airline would be HKG - China.

Quoting cchan (Reply 62):
My suspicion is that they will mainly target the HKG-China market, hence they need MU partnership.

No need for suspicion, Jetstar Group's CEO confirmed that HKG - China is the primary market. This airline is basically just a test. If it proofs to be successful and its business model in this particular market viable, than Jetstar China is on the way.
 
Sydscott
Posts: 3450
Joined: Thu Oct 30, 2003 11:50 am

RE: Qantas And China Eastern To Launch Jetstar HK

Thu Mar 29, 2012 9:50 pm

Quoting cchan (Reply 62):
Depends on what market they are going to serve. With the assistance of MU, if they get HKG-China rights, they have very good chance to be successful. My suspicion is that they will mainly target the HKG-China market, hence they need MU partnership.

There are only 2 destinations in China and none in Taiwan on that map. I'd say the focus is going to be HKG-China, HKG-Taiwan, HKG-Korea and then linking in with existing Jetstar operations at SIN, MNL, NRT and SGN. What's interesting is that even though JQ doesn't have an operation in Manila, they still fly from MNL to SIN, NRT, KIX and DRW. So it's logical to add a HKG flight into that and maybe position it for onwards service to a 3rd Japanese City to link in with Jetstar Japan.

Quoting huaiwei (Reply 63):
QF killing SQ's profits? Where did you get that kind of info? The reverse is probably more true, and last I checked, the Oceanian market has been one of the bigger money earners for SQ as a whole even in the midst of the financial crisis.

I don't think JQ Asia is "killing" SQ's profits. SQ isn't really even aimed at the market segment that JQ is and there have been other factors in play that have had more effect on profits.

Quoting huaiwei (Reply 63):
What really damaged SQ's profits is a combination of fuel prices and competition from three major LCCs.

Exactly!

Quoting PezySPU (Reply 64):
If it proofs to be successful and its business model in this particular market viable, than Jetstar China is on the way.

And in the end that's where Jetstar wants to be. On the Chinese mainland, in the Chinese domestic market.
 
aeroflop
Posts: 53
Joined: Thu Mar 29, 2012 7:12 am

RE: Qantas And China Eastern To Launch Jetstar HK

Thu Mar 29, 2012 10:03 pm

So what slots are they going to get? 0200-0400?
There is no need for more LCC!!! They sprawl up and fail every year! Waste of everyones time.
 
cchan
Posts: 975
Joined: Sat May 17, 2003 8:54 pm

RE: Qantas And China Eastern To Launch Jetstar HK

Thu Mar 29, 2012 10:51 pm

Quoting aeroflop (Reply 66):
There is no need for more LCC!!! They sprawl up and fail every year! Waste of everyones time.

Not for Ryanair, Air Asia, JetStar and the many others I can think of. They seem to prosper at the expense of other carriers.

Quoting Sydscott (Reply 65):
So it's logical to add a HKG flight into that and maybe position it for onwards service to a 3rd Japanese City to link in with Jetstar Japan.

Agreed but Cebu Pacific would be a very difficult one to beat. Their fares are cheap and their services are better than JetStar.

[Edited 2012-03-29 15:52:19]
 
TruemanQLD
Posts: 1346
Joined: Sat Feb 24, 2007 1:09 pm

RE: Qantas And China Eastern To Launch Jetstar HK

Fri Mar 30, 2012 1:02 am

Quoting aeroflop (Reply 66):
There is no need for more LCC!!! They sprawl up and fail every year! Waste of everyones time.

Sure lots of them do, but JQ is an established, quite large LCC currently in 5 other markets so they know how to profitably operate in a LCC environment. Why is there no need for a LCC? The aviation market over the past 10-15 years is a very clear sign there is need for LCC, and HKG is a relatively untapped LCC market

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