China Eastern, Qantas team up for new HK LCC

by Payload Asia

China Eastern Airlines and the Qantas Group (which owns the Jetstar Group) have entered into a new strategic alliance to take its successful low fare airline model to China with the creation of
Jetstar Hong Kong.

Jetstar Hong Kong will tap the partners’ local knowledge, networks
and successful low cost carrier model to service short haul routes in Asia, including Greater China, Japan, South Korea and Southeast Asia, the duo said, adding that it will be the first LCC based in Hong Kong.

Subject to regulatory approval Jetstar HK services will start in 2013 with a fleet of three Airbus A320s, growing to 18 A320s by 2015. With a total maximum capitalisation of up to US$198 million
the shareholding will be equally held by China Eastern Airlines and Qantas Group.

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 fares model throughout Asia, including Greater China, and are excited to be the first major Chinese carrier to bring this
travel option to the region,” said Liu.

“Cooperation with Qantas Group is a key step in China Eastern Airlines’ international expansion strategy and an excellent opportunity for China Eastern Airlines to develop low cost carrier
operations to complement its existing business model.

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,” Joyce said. “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.

This will also apply to Jetstar Hong Kong, which will leverage the local knowledge and scale of China Eastern Airlines with the successful low cost model of Jetstar,” added Joyce.

Vice chairman and president of China Eastern Airlines, Ma Xulun,
said: “Jetstar Hong Kong will maximise synergies by combining Jetstar Group’s resources including brand management, commercial management, safety, aircraft maintenance and IT systems with China Eastern Airlines’ leading position in the Chinese aviation market.”