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BestWestern
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 5:39 am

Hong Kong airlines is for sale / flotation - the perfect entry for a LCC operator like air Asia to enter the market and create proper competition to CX's high fares on regional routes - something HX has failed spectacularly to do.
Greetings from Hong Kong.... a subsidiary of China Inc.
 
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zeke
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 5:59 am

Quoting BestWestern (Reply 50):

Hong Kong airlines is for sale / flotation - the perfect entry for a LCC operator like air Asia to enter the market and create proper competition to CX's high fares on regional routes - something HX has failed spectacularly to do.

I thought the float plans quietly went away in March when they decided not to file the required documents withing the 6 month period. Something to do with financials not stacking up and a few IPOs at the time being brought into question ?
Human rights lawyers are "ambulance chasers of the very worst kind.'" - Sky News
 
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LAX772LR
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 7:23 am

Quoting jetblue1965 (Reply 12):
Just because Australia loves being so generous doesn't mean everyone else has to follow that modus operandi

  

Quoting zeke (Reply 17):
Did you actually read the decision ?
What part of the decision was not consistent with their previous rulings which other airlines in HKG have to work with ?

^ This

Quoting seahawk (Reply 19):
Why is Hong Kong blamed for something the EU3 and US3 want from their governments?

That's the disparity I'm not seeing here... the same thing would've likely happened in both the USA and the EU, so why is HKG being treated as if it's some manner of renegade?
I myself, suspect a more prosaic motive... ~Thranduil
 
81819
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 7:31 am

Quoting zeke (Reply 43):
Hkg is not protecting any airline, it is following its own domestic laws. That is very clear if you read the decision I posted above.

Semantics.

I'd suggest it is the application of Hong Kong Basic Law that is at question here!

From my reading of the Hong Kong Basic Law (2 years ago) a fair amount of the law is up for interpretation. If I remember correctly, I previously argued on this forum that legal precedence and how foreign owned companies currently operate would influence how the law is applied.

From what I can work out the ruling has taken the franchise agreement and the conditions therein as evidence that the Jetstar Hong Kong entity is controlled externally. I believe this to be a flawed ruling on the grounds that:

(1) a franchise contract normally covers all aspects of a franchises operations including conditions where agreement between parties can not be met. It is normal practice for "default clauses" to protect the legal owner of the franchise.
(2) it is unlikely a situation would ever occur where, at the same time all of the default conditions of the franchise agreement would be applied; and as a consequence it is highly unlikely the Jetstar Group and China Eastern could ever be in a situation where they have total influence over JHK as outlined in the ruling
(3) if a situation did occur where all of the default conditions of the franchise agreement did occur, the board including the foreign shareholder members would still have legal duties to ensure the requirements of Hong Kong Basic Law were maintained
(4) In practice the franchise agreement and the conditions therein would act secondary to the actual operational needs of the airline. The Jetstar Japan and Asia franchises are good examples of where it has been shown the Jetstar Group has allowed changes to the Jetstar model for the good of the franchise airline.
(5) The airline is a Pan-Asian airline and as such co-ordination of flights and route structures should be considered normal. In reality such an agreement between JHK , the Jetstar Group and Chnia Eastern would only have a real material effect on a relatively small number of routes. As such I don't think it can be properly argued that the Jetstar Group and China Eastern have control on which routes JHK would fly.

It will be interesting to see how this all pans out!
 
timtam
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 7:59 am

Quoting SInGAPORE_AIR (Reply 49):
All for "sham" structures (Jetstar Asia) so long as it benefits the Qantas Group does it ? Or would you claim to have exclusivity to deem what is a "sham" and what isn't.

Laws designed for a protectionist era. But protectionism is economically flawed which is why these structures that circumvent the intent but not the strict interpretation of the laws are let through.
 
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zeke
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 8:55 am

Quoting travelhound (Reply 53):
Semantics.

I'd suggest it is the application of Hong Kong Basic Law that is at question here!

No, what you are saying is that Hong Kong should not have the power to make its own laws, or issue its own rulings. The structure would never have been allowed to operate in Australia, yet they think HKG should have to put up with it.

There is no denial the airline was created as part of the Qantas pan asia strategy, there is no denial the Qantas purchased the aircraft, there is no denial that at the time of licence application the airline was 100% foreign owned.

The terms in that franchise agreement were not negotiated with HKG management, Qantas setup a shelf company in HKG, employed a few people, and then got that company to enter into a sham franchise agreement.

There is no Hong Kong input into any of it, all the decisions and business process was being done out of Australia, most of which happened even before the shelf company was even started up.

Quoting travelhound (Reply 53):
It will be interesting to see how this all pans out!

Not sure what you mean, the application and appeal has been denied.

Quoting timtam (Reply 54):
Laws designed for a protectionist era. But protectionism is economically flawed which is why these structures that circumvent the intent but not the strict interpretation of the laws are let through.

The laws is almost universal, it derives from art article 1 of the Chicago convention. Each country has its own sovereignty. What does vary is how each country has defined as the test to make an airline local so it can operate internationally. Most countries have a 51% rule, the US has I think a 75% local rule, Hong Kong instead of defining a shareholding percentage that can be manipulated like in Singapore has a test that the principle place of business must be in Hong Kong. Australia uses a combination of percentage shareholding and effective control rule.

An airline that wants to exercise Singaporean airspace or Singaporean air traffic rights, you need to meet Singaporean laws. You want to exercise Hong Kong airspace or Hong Kong air traffic rights, you need to meet Hong Kong laws.

Very simple concept, but a concept not found in many industries. When HKG issues a licence to an airline, it is saying to other countries that this is a sovereign representative of Hong Kong, grant them air traffic rights as a HKG carrier. There is no provision for in HKG law to hand over sovereignty to a Qantas pan Asia strategy.

There was a very recent demonstration on how this laws can create confusion, when Indonesia AirAsia Flight 8501 crashed, why did the CEO of Air Asia (Indonesia AirAsia) come down from Malaysia when it was an Indonesian airline that crashed ? When did you ever see the CEO of Indonesia AirAsia in the news ?
Human rights lawyers are "ambulance chasers of the very worst kind.'" - Sky News
 
wzafar
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 9:31 am

Sad. The customer loses out..
 
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enzo011
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 10:05 am

Why all the comments about protecting only Hong Kong based airlines? If a LCC was set up as a truly Hong Kong based entity then the rules in place would be there to protect it as well as CX and the rest. So if a Air Asia Hong Kong were to be started and their application approved, they would be able to take advantage of the same rules that are stopping Jetstar HK.
 
SInGAPORE_AIR
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 10:59 am

Quoting timtam (Reply 54):
But protectionism is economically flawed which is why these structures that circumvent the intent but not the strict interpretation of the laws are let through.

I'll remember that next time you and your forum members lash out at an Asian airline if such airline wishes to gain access to the Transpacific route between Australia and the USA.
Anyone can fly, only the best Soar.
 
BestWestern
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 11:31 am

Quoting zeke (Reply 51):

As I posted at the time and was criticised for it, the HX books and so called profits are driven by the leasing of aircraft to HU and the sale of seat allocations to HNA tour operators. These revenues could dry up in an instant - hence why the investors saw through the prospectus.

HX will only work as a true LCC and not a so called four star carrier.
Greetings from Hong Kong.... a subsidiary of China Inc.
 
jupiter2
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 11:36 am

Quoting SInGAPORE_AIR (Reply 58):

I'll remember that next time you and your forum members lash out at an Asian airline if such airline wishes to gain access to the Transpacific route between Australia and the USA.

If SQ had tried to start SIN-Australia-LAX flights via CNS or DRW, it probably would've been approved, simply because it would be a pretty direct routing and it wasn't/isn't currently served. But, going as far south as SYD, just couldn't be described as a "natural" routing for a SIN/LAX flight and as such was being viewed as precisely what it was. If SQ tried it now they would have even less chance as there is considerable competition on the route now.

Anyhow, Singapore based airlines really have no reason to complain about the access they have to Australia and frankly neither do CX. However, you can expect Singapore based airlines to get further rights long before it would ever be considered for CX or other Hong Kong based airlines. CX will just have to keep up gauging the flights they can.
 
jacobchoi
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 11:44 am

Quoting SInGAPORE_AIR (Reply 58):
'll remember that next time you and your forum members lash out at an Asian airline if such airline wishes to gain access to the Transpacific route between Australia and the US

Basically Qantas just wants to have something that is not rightfully theirs, because they cannot get their own game together and make Asia work from their homeland. I'm sure if they want to expand in HK, they could always revive PER-HKG and the second daily SYD-HKG. But no! They are not good enough to do so.

Quoting BestWestern (Reply 59):
HX will only work as a true LCC and not a so called four star carrier.

I've always been dubious about HX's management. They say they're a HK company yet they have simplified chinese in their cabin signage.
 
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EK413
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 11:51 am

Quoting RyanairGuru (Reply 3):
Hopefully this is appealed all the way to the Hong Kong High Court. It is repulsive that the lobbying of entrenched vested interests can overrule the clear public benefits of increased competition and open markets. A shameful, shameful day for Hong Kong.

        

Quoting JacobChoi (Reply 7):
Quoting RyanairGuru (Reply 3):
A shameful, shameful day for Hong Kong.

No. We do not want a Singapore

Quoting RyanairGuru (Reply 3):
clear public benefits of increased competition and open markets

Considering the real loss here would be the consumers. JQ would've brought what the travelling public benefits affordable airfares.

Quoting timtam (Reply 8):

Just goes to show that Hong Kong really is not open for business.

Time for the Australian Government to retaliate and reduce the frequencies between Australia and Hong Kong in the bilateral.

Certainly is, it's time Australian government stood their grounds and blocked further rights.

Quoting PA515 (Reply 9):
Not really. Qantas doesn't deserve any sympathy, they didn't comply with Hong Kong law.

Why don't they? The JQ Hong Kong venture was going to bring competition and affordable airfares.

CX doesn't deserve any sympathy which was the drive behind the decision.

EK413
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SInGAPORE_AIR
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 12:13 pm

Quoting jupiter2 (Reply 60):
But, going as far south as SYD, just couldn't be described as a "natural" routing for a SIN/LAX flight and as such was being viewed as precisely what it was.

Thanks for pointing out the atlas. How convenient a cover for blatant protectionism.

Even if we take the flawed logic that Hong Kong is being protectionist it does cut both ways if you want to play that game.
Anyone can fly, only the best Soar.
 
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zeke
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 12:14 pm

Quoting EK413 (Reply 62):

HKG has far more competition than Australia, even Qantas bring their aircraft here for maintenace. How many LCC operate into HKG vs SYD ? How many international carriers operate into HKG vs SYD ?

SYD MEL is the 5th busiest city pair in the world, how many airlines on it ?
Human rights lawyers are "ambulance chasers of the very worst kind.'" - Sky News
 
jetblue1965
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 12:15 pm

Quoting EK413 (Reply 62):

Do you have any shred of data to prove that airfares out of HK are unaffordable, and that it's only the bourgeois elites that are flying ?

HKG, despite being a small city, has an airport clearing in excess of 50 mil annual pax. You think unaffordable fares can lead to this kind of pax volume ?
 
qf002
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 12:22 pm

Quoting JacobChoi (Reply 61):
Basically Qantas just wants to have something that is not rightfully theirs

How is that any different to CX targeting (and profiting from) Australia-Europe traffic? Does that traffic not "rightfully" belong to Australian and European carriers?

Quoting zeke (Reply 64):
SYD MEL is the 5th busiest city pair in the world, how many airlines on it ?

The difference being that anybody anywhere in the world can start an airline and go after traffic on the SYD-MEL route.
 
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zeke
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 12:43 pm

Quoting qf002 (Reply 66):
How is that any different to CX targeting (and profiting from) Australia-Europe traffic? Does that traffic not "rightfully" belong to Australian and European carriers?

CX does take consumers to/from Australia/Europe, the consumers belong to no one. People are free to make their own travel arrangements.

Look at the international market share Hong Kong carriers have had over the past decade, I dont think it has even changed much from 5%.

Quoting qf002 (Reply 66):
The difference being that anybody anywhere in the world can start an airline and go after traffic on the SYD-MEL route.

Which does not answer the question, how many airlines on the route ?

Which brings me back to the original point, where is HKG noncompetitive ?
Human rights lawyers are "ambulance chasers of the very worst kind.'" - Sky News
 
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EK413
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 12:57 pm

Quoting zeke (Reply 64):
Quoting EK413 (Reply 62):

HKG has far more competition than Australia, even Qantas bring their aircraft here for maintenace. How many LCC operate into HKG vs SYD ? How many international carriers operate into HKG vs SYD ?

So I take it CX couldn't handle the thought of JQ setting up a base in Hong Kong so they went crying wolf. Once again the travelling public are the real losers here.

Quoting jetblue1965 (Reply 65):
Quoting EK413 (Reply 62):

Do you have any shred of data to prove that airfares out of HK are unaffordable, and that it's only the bourgeois elites that are flying ?

If stats might show the airport is clearing 50+ million doesn't also necessarily mean airfares are at an all time low. Regardless, I'm still baffled why an airline wanting to establish a low-cost carrier is seen as the enemy.

It's obvious CX feel threaten.

EK413
Good evening, ladies and gentlemen. We are tonight’s entertainment!
 
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zeke
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 1:08 pm

Quoting EK413 (Reply 68):
So I take it CX couldn't handle the thought of JQ setting up a base in Hong Kong so they went crying wolf. Once again the travelling public are the real losers here.

You dont even see the problem with that statement "JQ setting up a base in Hong Kong", the licence was denied because it was not a Hong Kong managed airline. You have just confirmed what the licencing authority put in print. It was not a HKG entity trying to setup an airline, it was QF/JQ.

If you read the decision, every airline in HKG objected to the application, distorting the truth is not helpful. Every airline complained because the application was not legal under the local laws, the licencing authority (not one particular airline) upheld that view.
Human rights lawyers are "ambulance chasers of the very worst kind.'" - Sky News
 
jetblue1965
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 1:13 pm

Quoting EK413 (Reply 68):

If stats might show the airport is clearing 50+ million doesn't also necessarily mean airfares are at an all time low. Regardless, I'm still baffled why an airline wanting to establish a low-cost carrier is seen as the enemy.

So if DPRK government establishes a LCC in Australia, you'll actually fly them ?

HK has no issues with LCC - they have HKAir/HKExpress locally, and tons of foreign competition such as AirAsia, Peach, JejuAir etc. HK has issues with people creating puppet organizations.

Just because Australia has an extremely liberal aviation policy does NOT mean every other nation/state/territory must follow their model. Australia allowing everyone on earth flying SYD-MEL has NOTHING to do with whether JQHK is legit or not.
 
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EK413
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 1:34 pm

Quoting zeke (Reply 69):
It was not a HKG entity trying to setup an airline, it was QF/JQ.

Ownership is split equally between Shun Tak Holdings, Qantas Airways (Jetstar Group's parent) and China Eastern Airlines.

Quoting jetblue1965 (Reply 70):
Quoting EK413 (Reply 68):

If stats might show the airport is clearing 50+ million doesn't also necessarily mean airfares are at an all time low. Regardless, I'm still baffled why an airline wanting to establish a low-cost carrier is seen as the enemy.

So if DPRK government establishes a LCC in Australia, you'll actually fly them ?

Ever thought the stats are driven by; growth in transfer / transit traffic?

EK413
Good evening, ladies and gentlemen. We are tonight’s entertainment!
 
VH-BZF
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 2:04 pm

Jetstar HK was all about bringing LC competition to HKG. Given the open skies arrangements in many countries including Australia, i see nothing wrong with the QF group with partners looking to expand their presence in the region, employing locals and providing competition to the carriers currently flying there. It is a pity that the HK authorities are denying them an AOC. Either way, the residents of HK and southern China are the probably the big losers here. I guess too that it's not over until the fat lady sings, so lets wait and see what plays out?

BZF
Ansett Australia - (was) One of the worlds great airlines!
 
jetblue1965
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 2:20 pm

Quoting EK413 (Reply 71):
Ever thought the stats are driven by; growth in transfer / transit traffic?

It's driven by a combination of both. CX routinely offer dirt cheap fanfares, and if you bother reading any HK aviation blogs, you'll notice how frequently the LCCs are offering dirt cheap fares (like HKD 68 one-way pre-tax pre-YQ). There's no shortage of low fares in HKG - that's an imaginary construct of the failed JQHK.
 
aerokiwi
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 2:32 pm

Quoting EK413 (Reply 71):
Ownership is split equally between Shun Tak Holdings, Qantas Airways (Jetstar Group's parent) and China Eastern Airlines.

That's nice. But the Hong Kong law has a more complex measure than simple ownership, as Zeke continually points out but apologists continue to just, I dunno, ignore. The law is transparent. It is sovereign. JQ (and QF, effectively) did not comply. One would think they'd lose their jobs for such a monumental and obvious error, but, you know, shrug and LOL. It's just shareholders money and the "crisis" has passed.

And here's the clincher - JQ HK airfares would be determined by the Melbourne head office. I know this. I've seen the team. I've indirectly worked with them.

So tell me, if you can't even manage your own prices, are you really in control? Think of it if the situation was reversed and Qantas' fares were controlled from far off lands. Now throw in purchasing, aircraft, route selection. Changes things, eh?
 
jetblue1965
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 2:46 pm

Quoting aerokiwi (Reply 74):
Quoting EK413 (Reply 71):
Ownership is split equally between Shun Tak Holdings, Qantas Airways (Jetstar Group's parent) and China Eastern Airlines.

Translation : ownership is 1/3rd Qantas, 1/3rd casino, and 1/3rd communist China
 
jacobchoi
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 3:14 pm

Quoting qf002 (Reply 66):
How is that any different to CX targeting (and profiting from) Australia-Europe traffic? Does that traffic not "rightfully" belong to Australian and European carriers?

Well. TG, SQ, EK, EY, MH, QR and to a lesser extent the Chinese Carriers all have a share in the Australia-Europe traffic. If that's the case, they should set up multiple LCC bases to take over the world from Singapore, Bangkok, Dubai and etc... Your logic is flawed

[Edited 2015-06-26 08:21:37]
 
jacobchoi
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 3:23 pm

Quoting EK413 (Reply 68):
So I take it CX couldn't handle the thought of JQ setting up a base in Hong Kong so they went crying wolf. Once again the travelling public are the real losers here.

Secondly, it is not as if there is an abundance of low fares already. There is HK Express, 2 Air Asia franchises, Air Busan, Eastar Jet, Jeju Air, Jin Air, 3 jetstar franchises, Juneyao, Orient Thai, Peach, Scoot, Siam Air, Tiger Air, Vanilla Air, Spring. What would JQ bring that is not offered? QF has already lost a lot of money in this unnecessary, foolish dream and quite frankly I'm shocked that such an airline of its reputation haven't thought this through before hand.

For instance, between HK and Bangkok, there is Axis Lines, tigerair, thai air asia, city airways. Between HK and ICN, there is Eastar jet, Jin Air, HK express and Jeju Air.


Basically, QF is the one crying wolf. Because the cannot compete effectively in Asia, they are trying to wreck and bring down to the bottom of those who can

[Edited 2015-06-26 08:25:55]

[Edited 2015-06-26 08:29:47]

[Edited 2015-06-26 08:31:51]
 
CHCalfonzo
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 3:37 pm

Quoting zeke (Reply 17):
I would also remind you that neither Japan or Vietnam permitted Jetstar to operate international flights when the certificates were initially issued. Australia also had many majority foreign owned airlines that were not permitted to operate international services. As all the services applied for from HKG were international services, this should not have been unexpected.

I think Zeke has hit on the key point here. There is a clear difference between granting an airline the right to compete domestically and to use internationally negotiated air rights. Hong Kong does not have the former, therefore JQ is on shaky ground applying to use the latter when they are clearly an Australian company. The fact Singapore did this does not automatically make it he right decision for Hong Kong (or Singapore for that matter).

The benefits of open competition in aviation is always quoted on this site without any clear evidence for the net benefit to the country involved of opening up air rights like this.
 
jetblue1965
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 4:18 pm

Quoting JacobChoi (Reply 77):
QF has already lost a lot of money in this unnecessary, foolish dream and quite frankly I'm shocked that such an airline of its reputation haven't thought this through before hand.

No sympathy at all. QF doesn't know how to follow local regulations and got cake on their face.
 
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zeke
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 4:23 pm

Quoting EK413 (Reply 71):
Ownership is split equally between Shun Tak Holdings, Qantas Airways (Jetstar Group's parent) and China Eastern Airlines.

I believe at the time of application, it was 100% foreign owned. If you read the decision, the ownership of the shares is not an issue. Looking at the document, if there is foreign ownership, they are fine with that, but these people who represent those shares need to be in HKG, and the decisions made in HKG, it needs to be a HKG company either excelling or failing. Not puppets that fly in for board meetings that rubber stamp a decision made in Melbourne.

Quoting aerokiwi (Reply 74):
And here's the clincher - JQ HK airfares would be determined by the Melbourne head office. I know this. I've seen the team. I've indirectly worked with them.

The deal also stated they were not allowed to compete with a number of associated airlines.

Quoting JacobChoi (Reply 77):
What would JQ bring that is not offered?

They did express an intent on operating routes not being served by any airline. One needs to ask if there is a reason why the routes have no current service, and if they would have actually operated them. Their initial application from memory had over 250 destinations.
Human rights lawyers are "ambulance chasers of the very worst kind.'" - Sky News
 
bill142
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 11:20 pm

Quoting zeke (Reply 69):
You dont even see the problem with that statement "JQ setting up a base in Hong Kong", the licence was denied because it was not a Hong Kong managed airline.

But it is a Hong Kong managed and controlled airline. Any assertion that it is otherwise controlled outside of Hong Kong is entirely circumstantial. If Jetstar doesn't comply with HK basic law then it could be claimed CX is being controlled out by Swire out of London.
 
chrisp390
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RE: Jetstar Hong Kong Denied Licence

Fri Jun 26, 2015 11:38 pm

Quoting bill142 (Reply 81):

Yes, how does CX fulfil the basic law requirements if it is majority owned by a foreign entity?
 
lutfi
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RE: Jetstar Hong Kong Denied Licence

Sat Jun 27, 2015 12:20 am

Because it isn't.

Quoting chrisp390 (Reply 82):

Yes, how does CX fulfil the basic law requirements if it is majority owned by a foreign entity?

Because it isn't. 44% of the shares are held by a company called Swire Pacific. Which is based in HK. About 30% of the shares of that company are held by a company called Swire in London.
 
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enzo011
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RE: Jetstar Hong Kong Denied Licence

Sat Jun 27, 2015 12:28 am

Quoting bill142 (Reply 81):
But it is a Hong Kong managed and controlled airline. Any assertion that it is otherwise controlled outside of Hong Kong is entirely circumstantial. If Jetstar doesn't comply with HK basic law then it could be claimed CX is being controlled out by Swire out of London.
Quoting chrisp390 (Reply 82):
Yes, how does CX fulfil the basic law requirements if it is majority owned by a foreign entity?

Did either of you read the document linked in reply 2? It is the fact that the proposed airline would have its decisions made for it outside of the Hong Kong management. The decisions on pricing, fleet and destinations would be made by the other shareholders and not by the management team installed at Hong Kong.

Decisions made regarding the network for Jetstar HK would need to go through the Flying committee. This committee consists of two members from the China Eastern Airlines Group, one from Jetstar Hong Kong and one from the Jetstar group. So the local representative can be outvoted, do you think this is the definition of a local run airline?
 
jupiter2
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RE: Jetstar Hong Kong Denied Licence

Sat Jun 27, 2015 12:37 am

Quoting SInGAPORE_AIR (Reply 63):
Thanks for pointing out the atlas. How convenient a cover for blatant protectionism.

So sorry that SQ got denied something that they really weren't entitle too. SQ has and will get plenty out of into the future, including a substantial ownership stake in a major domestic airline. The SQ attempt at SYD/SIN was pretty weak, pretty much akin to this effort by JQ in HKG.

As others have mentioned, the authorities have probably done JQ a favour here, they can quietly write this failed investment off, redeploy the assets elsewhere and move on to other markets, or better still just concentrate on the existing projects.



Quoting zeke (Reply 64):
SYD MEL is the 5th busiest city pair in the world, how many airlines on it ?

4 airlines in our glorified 2 airline market. Why ? Do you have some spare cash you want to throw away ? I'm sure the Australian government would love CX to set up an airline to attempt to compete in the Australian domestic market. Don't know how successful they'd be though  
 
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zeke
Posts: 15172
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RE: Jetstar Hong Kong Denied Licence

Sat Jun 27, 2015 1:10 am

Quoting chrisp390 (Reply 82):
Yes, how does CX fulfil the basic law requirements if it is majority owned by a foreign entity?

CX is a publicly listed company on the Hong Kong exchange (HKEX), if you were rich enough you could buy all the shares, it could be 100% foreign owned, and still meet the basic law requirements. It meets those requirements as the airline is run out of HKG, its principle place of business is HKG.

Where shares are owned, and by whom is a test used inn other jurisdictions such as Canada, Australia and the USA.

Quoting lutfi (Reply 83):
Because it isn't. 44% of the shares are held by a company called Swire Pacific. Which is based in HK. About 30% of the shares of that company are held by a company called Swire in London.

Swire Pacific is also listed company on the HKEX (codes 19 & 87), it is a very large HKG company with assets of around HKD$300 billion. It is a diverse company, with the aviation part being small. For example in Asia Swire does all of the Coca Cola associated brands bottling, it has a large commercial property portfolio, hotels, very big in offshore support vessles, and raw material like sugar.

Quoting jupiter2 (Reply 85):
4 airlines in our glorified 2 airline market. Why ? Do you have some spare cash you want to throw away ? I'm sure the Australian government would love CX to set up an airline to attempt to compete in the Australian domestic market. Don't know how successful they'd be though

Just demonstrates that all this lack of competition crap being directed at HKG is just that, crap. HKG would probably have over 20 low cost airlines, and on the 5th busiest route in the world between SYD-MEL, there are only 4 airlines operating.

CX has been denied rights time an time again to sell domestic tickets (eg ADL-MEL, CNS-BNE). Hong Kong Airlines also were recently told they could not sell domestic tickets for a proposed (CNS-OOL) service.

Hong Kong is more than happy to have an open skies agreement with Australia, unlimited flights between, and unlimited beyond rights as well. Naturally Qantas only wants a one way agreement, unlimited beyond rights from HKG for Australian carriers, no beyond rights for HKG airlines from Australia, and no open skies between HKG-Australia, restrict access to the Australian market by HKG carriers.

Where are all these pro competition people when CX wanted to operate the Pacific ? Would gladly give Qantas, Virgin, Untied, and Delta a run for their money.
Human rights lawyers are "ambulance chasers of the very worst kind.'" - Sky News
 
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777Jet
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RE: Jetstar Hong Kong Denied Licence

Sat Jun 27, 2015 1:41 am

Great news for QF!

Hopefully QF now focuses on more sound ideas than to set up a LCC in such a problematic market.
DC10-10/30,MD82/88/90, 717,727,732/3/4/5/7/8/9ER,742/4,752/3,763/ER,772/E/L/3/W,788/9, 306,320,321,332/3,346,359,388
 
BestWestern
Posts: 8358
Joined: Fri Sep 08, 2000 8:46 pm

RE: Jetstar Hong Kong Denied Licence

Sat Jun 27, 2015 1:47 am

Quoting JacobChoi (Reply 61):
They say they're a HK company yet they have simplified chinese in their cabin signage.

They are serving a chinese tour group base and the odd lost business passenger

Quoting VH-BZF (Reply 72):
Jetstar HK was all about bringing LC competition to HKG.

It was all about making profits for Qantas.

Quoting VH-BZF (Reply 72):
Either way, the residents of HK and southern China are the probably the big losers here.

Qantas are the biggest loser. Strategically, it has killed the QF position in Oneworld - An airline based at another carrier home base - and using a competitor alliance carrier as their trojan horse.

Qantas does not understand the long term game that needs to be played in China and Asia.

Quoting aerokiwi (Reply 74):
JQ HK airfares would be determined by the Melbourne head office.

The usual way to determine control of a business is

1 - control of the finances
2 - control of inventory
3 - control of pricing

What I understand is that all three were going to be controlled centrally.

Quoting jetblue1965 (Reply 75):
ownership is 1/3rd Qantas, 1/3rd casino, and 1/3rd communist China

I would love to know how the HO family got by the QF due diligence process for an approved partner.
Greetings from Hong Kong.... a subsidiary of China Inc.
 
jupiter2
Posts: 1739
Joined: Tue Jan 02, 2001 11:30 am

RE: Jetstar Hong Kong Denied Licence

Sat Jun 27, 2015 10:56 am

Quoting zeke (Reply 86):
Just demonstrates that all this lack of competition crap being directed at HKG is just that, crap. HKG would probably have over 20 low cost airlines, and on the 5th busiest route in the world between SYD-MEL, there are only 4 airlines operating.

But, there is still nothing from stopping any one individual or company setting up an airline in Australia to operate domestic routes. The competition on the route is fierce and anyone who thinks about entering the market knows all to well that it would be a blood bath, with mainly their blood being spilt. However, if their pockets are deep enough and they are prepared to wear the losses and they meet all the licensing criteria, they would be welcomed.

Quoting zeke (Reply 86):
Hong Kong is more than happy to have an open skies agreement with Australia, unlimited flights between, and unlimited beyond rights as well. Naturally Qantas only wants a one way agreement, unlimited beyond rights from HKG for Australian carriers, no beyond rights for HKG airlines from Australia, and no open skies between HKG-Australia, restrict access to the Australian market by HKG carriers.

Where would there possibly be a benefit for any Australian airline ? CX and SQ especially do very well out of Australia and really have little reason to complain about the air services agreements between their respective countries and Australia. It shouldn't happen and never will, but there is always a nasty play that Australia could play (if they wanted to be really bitchy, lol) HKG is a single designator destination, they could be restricted to the same in Australia, maybe unlimited flights to SYD or MEL, both cities of comparable size to HKG.

   

Let's face it, this was a poorly executed attempt by QF/JQ at setting up this franchise. Let them take there money elsewhere where they will be welcomed.
 
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zeke
Posts: 15172
Joined: Thu Dec 14, 2006 1:42 pm

RE: Jetstar Hong Kong Denied Licence

Sat Jun 27, 2015 11:04 am

Quoting jupiter2 (Reply 89):
Where would there possibly be a benefit for any Australian airline ?

JQ could operate out of HKG on the routes proposed by Jetstar HKG under their existing Australian AOC without the need to setup a franchise.
Human rights lawyers are "ambulance chasers of the very worst kind.'" - Sky News
 
jupiter2
Posts: 1739
Joined: Tue Jan 02, 2001 11:30 am

RE: Jetstar Hong Kong Denied Licence

Sat Jun 27, 2015 11:39 am

Quoting zeke (Reply 90):

JQ could operate out of HKG on the routes proposed by Jetstar HKG under their existing Australian AOC without the need to setup a franchise.

Well that would be great, but it isn't going to happen is it and if that was to be allowed, it makes the whole point of this place of business law a sham. Which in turn, if it was to happen, would leave Hong Kong open to any other country which has an "Open skies" agreement in Hong Kong, looking to setting up similar operations.

Not going to happen.
 
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RyanairGuru
Posts: 8438
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RE: Jetstar Hong Kong Denied Licence

Sat Jun 27, 2015 11:39 am

Quoting SInGAPORE_AIR (Reply 63):

I'm not sure why you are so worked up about this, not least because at least 95% of Australians on ANet are strongly in favour of open skies. You aren't calling anyone out, but seem to have it in your head rage you are. Personally I really couldn't give a toss either way whether SQ flew to LAX or not. For whatever reason out government deemed it appropriate it block them from doing so, but direct you hostility towards the government rather than any random forum member with an Australian flag next to their name.

And I would encourage you to question your own impartiality before you have the nerve to call out anyone as a Qantas shill.

Quoting zeke (Reply 67):

You're missing the point. ANYBODY can fly SYD-MEL and (catch this) it will take a hell of a lot less than 2 years for them to gain approval.

Quoting aerokiwi (Reply 74):

I object to one word in your post: "transparent". In any Western democracy the word "control" would have been tested in the courts. It hasn't been, and therefore there is no clear guidance on what would satisfy this standard. By some objective assessments JQHK's structure would have adhered to a satisfactory standard of "control" but it doesn't meet other interpretations. This decision did nothing to qualify what standard was applied, and what criteria any future application should meet.

With all due respect to Zeke, he isn't a constitutional lawyer. While we all have our own opinions, the law is never black and white.
Worked Hard, Flew Right
 
User avatar
zeke
Posts: 15172
Joined: Thu Dec 14, 2006 1:42 pm

RE: Jetstar Hong Kong Denied Licence

Sat Jun 27, 2015 11:55 am

Quoting jupiter2 (Reply 91):
Well that would be great, but it isn't going to happen is it and if that was to be allowed, it makes the whole point of this place of business law a sham.

No it does not make it a sham, QF operating from HKG to LHR is not a sham, its operating under Australian air service agreements all the way. If Australia agreed to true ope skies, JQ could operate any of the 250 odd routes it applied for as an Australian airline from HKG, they would not be using HKG air traffic rights, they would be using Australian traffic rights which are largely unused in Asia. It is actually a smarter, cheaper, and quicker way of doing things. Just like the free trade agreement with China.

Quoting jupiter2 (Reply 91):
Which in turn, if it was to happen, would leave Hong Kong open to any other country which has an "Open skies" agreement in Hong Kong, looking to setting up similar operations.

Singapore and Hong Kong have a reciprocal agreement like that.

Quoting RyanairGuru (Reply 92):
You're missing the point. ANYBODY can fly SYD-MEL and (catch this) it will take a hell of a lot less than 2 years for them to gain approval.

It would take a lot longer than 2 years, CASA does not even know how to do an ATPL flight test yet under part 61.
Human rights lawyers are "ambulance chasers of the very worst kind.'" - Sky News
 
jupiter2
Posts: 1739
Joined: Tue Jan 02, 2001 11:30 am

RE: Jetstar Hong Kong Denied Licence

Sat Jun 27, 2015 12:32 pm

Quoting zeke (Reply 93):
QF operating from HKG to LHR is not a sham, its operating under Australian air service agreements all the way.

That was because it was part of the Australia/UK bi-lateral that allowed HKG as a stop over point and how many years did it take to get Hong Kong to agree to it ?

Quoting zeke (Reply 93):
If Australia agreed to true ope skies, JQ could operate any of the 250 odd routes it applied for as an Australian airline from HKG, they would not be using HKG air traffic rights, they would be using Australian traffic rights which are largely unused in Asia.

How many of those unused Australian traffic rights allow a stop over in HKG on the way ? Or as you are proposing, originating and concluding in HKG ? Or would they only be allowed to be operated if the flight does originate/conclude from Australia ?

Genuine questions, I'm sure you'll have the answers.

Quoting zeke (Reply 93):
Singapore and Hong Kong have a reciprocal agreement like that.

Hong Kong and Singapore are city, states though. Much easier for such a place to have open skies when they are city/states and are strategically placed globally. If Singapore or Hong Kong were located in the middle of the Southern Indian Ocean, how many open skies agreements do you think they would have ? It's all about location.
 
User avatar
zeke
Posts: 15172
Joined: Thu Dec 14, 2006 1:42 pm

RE: Jetstar Hong Kong Denied Licence

Sat Jun 27, 2015 12:54 pm

Quoting jupiter2 (Reply 94):
how many years did it take to get Hong Kong to agree to it

Australia would not reciprocate, Australian carriers have regional and long haul rights beyond HKG, HKG have no similar rights beyond Australia. Hong Kong carriers have been denied selling domestic sectors in Australia. Routes like HKG-BKK, HKG-SIN which Australia demanded and have rights for are unused.

Quoting jupiter2 (Reply 94):
How many of those unused Australian traffic rights allow a stop over in HKG on the way ?

Most bi-laterals I have read allow stop overs, the one between Australia and HKG does. e.g. CX used to route via POM to Australia.

Quoting jupiter2 (Reply 94):
Or as you are proposing, originating and concluding in HKG ?

Physically yes.

Quoting jupiter2 (Reply 94):
Or would they only be allowed to be operated if the flight does originate/conclude from Australia ?

I think that all depends on the other country, each country has its own sovereign rights. Australia has a lot of old rights that have been around since flying boat times.

Quoting jupiter2 (Reply 94):
If Singapore or Hong Kong were located in the middle of the Southern Indian Ocean, how many open skies agreements do you think they would have ? It's all about location.

But go back to the 1970s when Singapore and Dubai were not much more than fishing towns, and they did exactly that.

This industry moves in cycles, open skies is the best for the long term. And by open skies, I mean between and beyond rights. Something that would allow JQ operate the flights it wants to in the open from HKG without having to go behind back door sham arrangements.
Human rights lawyers are "ambulance chasers of the very worst kind.'" - Sky News
 
timtam
Posts: 310
Joined: Tue Nov 19, 2013 2:02 pm

RE: Jetstar Hong Kong Denied Licence

Sat Jun 27, 2015 1:55 pm

Quoting 777Jet (Reply 87):
Great news for QF!

Hopefully QF now focuses on more sound ideas than to set up a LCC in such a problematic market.

Ironically it is a bit like a get out of jail card for Qantas. They were committed to a business that made sense 4 years ago but today it doesnt really stack up any more.
 
CaptainKramer
Posts: 281
Joined: Thu Feb 09, 2012 8:12 pm

RE: Jetstar Hong Kong Denied Licence

Sat Jun 27, 2015 11:50 pm

Just curious, but how does Qantas Group know how to see through the set up of Jetstar, a LCC franchise in Japan, but not in Hong Kong?
 
jupiter2
Posts: 1739
Joined: Tue Jan 02, 2001 11:30 am

RE: Jetstar Hong Kong Denied Licence

Sun Jun 28, 2015 12:07 am

Quoting zeke (Reply 95):
Australia would not reciprocate, Australian carriers have regional and long haul rights beyond HKG, HKG have no similar rights beyond Australia. Hong Kong carriers have been denied selling domestic sectors in Australia. Routes like HKG-BKK, HKG-SIN which Australia demanded and have rights for are unused.

Beyond rights ex Australia for Hong Kong based airlines through Australia give them New Zealand and at a stretch South America, where else do you think they would go ? I'm pretty sure that CX if it chose could operate to New Zealand through Australia. HKG-BKK was always a dodgy one when the QF flight operated PER/SIN/HKG/BKK, but SIN/HKG was a "natural" stop over on route, just as HKG on the way to LHR. Hong Kong based airlines get the stop over points between Australia and Hong Kong and the ability to carry Australia originating passengers beyond Hong Kong on a single ticket (7th freedoms ?) an extremely valuable commodity.

Quoting zeke (Reply 95):
Most bi-laterals I have read allow stop overs, the one between Australia and HKG does. e.g. CX used to route via POM to Australia.

How many actually include HKG as a stop though ? HKG is hardly a stop over point to Vietnam, Taiwan, Philippines, etc from Australia.

Quoting zeke (Reply 95):
I think that all depends on the other country, each country has its own sovereign rights. Australia has a lot of old rights that have been around since flying boat times.

So a great number of those 230 routes that they may have applied for, may, or may not be covered by previous bilaterals and may, or may not require the flight to originate or conclude in Australia. Well that seems like a good basis for an open skies agreement.


Quoting jupiter2 (Reply 94):

But go back to the 1970s when Singapore and Dubai were not much more than fishing towns, and they did exactly that.

But they have great locations, if they didn't they'd still be small fishing towns.

Quoting zeke (Reply 95):
This industry moves in cycles, open skies is the best for the long term. And by open skies, I mean between and beyond rights. Something that would allow JQ operate the flights it wants to in the open from HKG without having to go behind back door sham arrangements.

True open skies would eventually lead to a few huge airlines dominating routes around the world, with a few smaller airlines filling in niche markets. Would be the end of a lot of national carriers as they just wouldn't be able to compete with the mega carriers.
 
Kashmon
Posts: 642
Joined: Thu Dec 04, 2014 8:08 am

RE: Jetstar Hong Kong Denied Licence

Sun Jun 28, 2015 12:54 am

Quoting BestWestern (Reply 24):

meh
those that have the CX/KA alternative
and still choose the mainland run
HK airlines/express
deserve to get
delayed
and treated like crap

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