HK rejects Jetstar JV bid

[trippin_the_rift]

Re: Jetstar Hong Kong Grounded

As I posted elsewhere, it's a shame the Australian regulators who approve landing rights and what not can't help a local business out and pull a few slots from CX... I get that QF/JQ aren't exactly small players who need help from big brother, but seeing as CX has obviously been so successful in lobbying the local HK government to reject JQ HK, if the same was true here of CX flights they might decide to back off a little bit.

I get that the premise is different, one is starting a local carrier, the other would simply be flying into this country. But if they can so obviously abuse their governments power to block competition, Australia really should get in on that act to show them that's all really isn't fair in love and war!

I think you'll find it's the other way around where cx wants more Australian slots and they're being declined...

Either way i think JQ hk knew it was screwed with all the hiccups since day 1.

 

[samh004]

Re: Jetstar Hong Kong Grounded

I think you'll find it's the other way around where cx wants more Australian slots and they're being declined...

Either way i think JQ hk knew it was screwed with all the hiccups since day 1.

So you're suggesting that if CX were granted more slots into Australia, they could re-influence the government into approving competition in their own hub?

 

[Himeno]

Re: Jetstar Hong Kong Grounded

I think you'll find it's the other way around where cx wants more Australian slots and they're being declined...

Declined by who?

The current Australia-Hong Kong Air Services Agreement allows for Hong Kong and Australia to each allocate up to 70 passenger flights per week to their airlines between Hong Kong and SYD, MEL, PER and BNE. Flights to/from other points in Australia are unlimited.
On the Australian side, QF currently holds rights to 25 flights, leaving 45 remaining for Australian carriers.
How many HKG-SYD/BNE/MEL/PER flights does CX have per week?

Under the current agreement, there is nothing stopping CX from adding flights to ADL, CNS, OOL, DRW or CBR.

 

[zainman]

Maybe HKG will allow it if Australia allows CX to fly Australia to USA

Still a loss for the customer that this venture wasn't allowed to take off.

 

[MEL_Traveller]

Still a loss for the customer that this venture wasn't allowed to take off.

I'm actually not too unhappy about it. I don't want profitable routes cherry-picked, driving down fares, and leading to service 'enhancements' on legacy carriers including no meals, no baggage, no IFE, and 29' seat pitch. And then what happens? The legacy carrier no longer operates, staff lose their jobs, and we're left with an inferior product of the LCC.

No thanks.

 

[dajop]

I'm actually not too unhappy about it. I don't want profitable routes cherry-picked, driving down fares, and leading to service 'enhancements' on legacy carriers including no meals, no baggage, no IFE, and 29' seat pitch. And then what happens? The legacy carrier no longer operates, staff lose their jobs, and we're left with an inferior product of the LCC.

In Singapore that sort of has and hasn't been happening.

SQ has struggled somewhat, but probably less to do with LCCs and more to do with the Middle Eastern carriers, and poor geographic position compared to CX. Silkair has however really thrived and it is almost a full service carrier (biggest disparity is no IFE, other than BYOD and no alliance benefits, although does have benefits for members of SQ - and now VA programs). And not all routes have gone from SQ to MI (Indian, Malaysian and Chinese leisure routes have), some have seen SQ replacing MI on one service a day (RGN, SUB). So it's not all doom and gloom when LCCs enter the market/hub of a well managed legacy carrier. The contrast is stunning to the poorly managed MH (which was in trouble well before MH 370), and it's ability to withstand the onslaught of EK and AK.

 

[ermen]

Most of you have clearly not read the decision judging by the comments.

i was all for Jetstar HK being setup here but after reading the judgement, I think QF got too arrogant for their own good.

In fact, QF seem to be the ones being cheeky here... And a slap in the face to HK Basic Law.

http://www.thb.gov.hk/eng/boards/transport/air/Summary of decision (Eng) 25062015.pdf

Basically, QF were still controlling the board, the flying committee, appointment of the CEO, routes flown, even with Shun Tak as the majorityon the Board...

 

[MEL_Traveller]

Re: Jetstar Hong Kong Grounded

As I posted elsewhere, it's a shame the Australian regulators who approve landing rights and what not can't help a local business out and pull a few slots from CX... I get that QF/JQ aren't exactly small players who need help from big brother, but seeing as CX has obviously been so successful in lobbying the local HK government to reject JQ HK, if the same was true here of CX flights they might decide to back off a little bit.

I get that the premise is different, one is starting a local carrier, the other would simply be flying into this country. But if they can so obviously abuse their governments power to block competition, Australia really should get in on that act to show them that's all really isn't fair in love and war!

What about 'certainty of business environment' and 'respect for the law'?

It's not optimal to have a business environment where things can be as uncertain as a government retaliating on behalf of a private enterprise simply because they don't like the laws of another country. The private enterprise should be more than capable of assessing it's own business decisions.

The law in Hong Kong seems quite clear with respect to control. If Qantas/Jetstar can't meet that, they should be allowed to operate anyway, and slots should be withdrawn from CX because...?

 

[trippin_the_rift]

Re: Jetstar Hong Kong Grounded

Declined by who?

The current Australia-Hong Kong Air Services Agreement allows for Hong Kong and Australia to each allocate up to 70 passenger flights per week to their airlines between Hong Kong and SYD, MEL, PER and BNE. Flights to/from other points in Australia are unlimited.
On the Australian side, QF currently holds rights to 25 flights, leaving 45 remaining for Australian carriers.
How many HKG-SYD/BNE/MEL/PER flights does CX have per week?

Under the current agreement, there is nothing stopping CX from adding flights to ADL, CNS, OOL, DRW or CBR.

Cathay operates 10 flights a day/70 per week to those major cities.

The way cx increases capacity is to switch from a330 to 777 as we have seen into Syd.

 

[Himeno]

Re: Jetstar Hong Kong Grounded

Cathay operates 10 flights a day/70 per week to those major cities.

The way cx increases capacity is to switch from a330 to 777 as we have seen into Syd.

Which only means they have maxed out their allowed flights to those major cities. They can start new flights to CBR tomorrow. The only thing stopping them is themselves.

 

[Isochronous]

Re: Jetstar Hong Kong Grounded

Which only means they have maxed out their allowed flights to those major cities. They can start new flights to CBR tomorrow. The only thing stopping them is themselves.

CBR probably doesn't have the demand for international flights to make it sustainable.

 

[N860CR]

The HK gov can (and should) be looking after HK interests. Just as we do in this country.

 

[samh004]

Disappointing to continually see corruption like this eating away at HK.

They should move the operation to SZX, at the right price they could still get the punters in and likely get better slot times too.

Considering what you said, I've had a look on the map and considering Shun Tak Holdings are involved, if they built a ferry terminal at the other end (SZX) then that could be a good way to access the airport, as you might not even need a VISA if you're boarding a ferry and entering an airport at the other end.

The HK gov can (and should) be looking after HK interests. Just as we do in this country.

I would honestly think HK interests would be cheaper fares, better choice of carriers, etc...

 

[MEL_Traveller]

I would honestly think HK interests would be cheaper fares, better choice of carriers, etc...

It would be interesting to see what evidence there is to support this. CX is a huge employer in Hong Kong.

On part two... 'better choice of carriers'... how so? How can a LCC be 'better' than a full service legacy carrier and all that those have to offer with bags, drinks, meals, connecting services, frequency of service, and things like provision of accommodation when things go wrong?

I think it's a pretty tough call for me to be able to say one way or the other if I am personally better off since the introduction of LCCs in Australia. I think service levels have gone down considerably. And for what? To save a few bucks?

 

[samh004]

It would be interesting to see what evidence there is to support this. CX is a huge employer in Hong Kong.

On part two... 'better choice of carriers'... how so? How can a LCC be 'better' than a full service legacy carrier and all that those have to offer with bags, drinks, meals, connecting services, frequency of service, and things like provision of accommodation when things go wrong?

I think it's a pretty tough call for me to be able to say one way or the other if I am personally better off since the introduction of LCCs in Australia. I think service levels have gone down considerably. And for what? To save a few bucks?

I wholeheartedly agree with you there that since LCC's in Australia I don't feel like I'm better off

However, what we place a value on is often not valued as much by everyone else.

Not everyone takes bags (or sees the value on a bag being included in the cost of every flight they take when they take a bag 10% of the time), nor do they want to pay the extra for drinks to be included of they don't drink (alcohol) or plan to take an overnight flight (and thus miss out on the service, yet still be paying for it as they sleep), same goes for food, especially economy food sometimes! I love to connect through SYD on my way to MEL, but most other people prefer to fly direct (crazy I know). Lastly, most people don't think about what happens when things go wrong, they just assume everything will be fine, but isn't that was travel insurance is for (that they also don't buy), and besides, some of that comes down to consumer protections in the country you're in... it happens in Australia because we have the protections, but less so in the LOTFAP if they decree it's an act of GOD!

Most people want to save a few bucks... plus I can imagine JQ HK sweetening the deal wrt earning points, akin to JQ NZ recently to give CX's fan fares a run for their money... as that really is the competition here... and I believe they don't offer points and a few sweeteners from the legacy world.

 

[ermen]

At the end of the day, JQ can set up JQ HK. Just give up control of the board, ceo and which routes JQ HK are allowed to fly.

Whilst I am in favour of JQ HK setting up in HKG to give people here better fares to various destinations (hopefully leisure), after reading the ruling, i can't believe that JQ had been so blatant in disregarding the common law concept of the principal place of business

 

[samh004]

At the end of the day, JQ can set up JQ HK. Just give up control of the board, ceo and which routes JQ HK are allowed to fly.

Whilst I am in favour of JQ HK setting up in HKG to give people here better fares to various destinations (hopefully leisure), after reading the ruling, i can't believe that JQ had been so blatant in disregarding the common law concept of the principal place of business

Even if they did have no control... I could imagine the scenario going something along the lines of:

1. JQ HK starting a new route that really hurts a CX route
2. CX making accusations again and the airline being suspended (despite no foul play this time, just smart thinking by the local board)
3. CX buying in to JQ HK in a deal that sees it stop interfering, but actually reduces routes/competition
4. JQ HK closes down

 

[eastwest101]

At the end of the day, JQ can set up JQ HK. Just give up control of the board, ceo and which routes JQ HK are allowed to fly.

Whilst I am in favour of JQ HK setting up in HKG to give people here better fares to various destinations (hopefully leisure), after reading the ruling, i can't believe that JQ had been so blatant in disregarding the common law concept of the principal place of business

This sort of raises the issue of where Qantas want to go now as far as JQ HK is concerned, as it stands, the current company structure of JQHK is not compliant with HK law (even after the window dressing efforts).

All of the options below have very long lead times so will be interesting to see what happens.

1. Simply give up and forget about it (JQHK) ? (How easy will this be, considering no aircraft but still a business structure and staff to wind up?)
2. Other legal options of appeal?
3. Totally 'rejig' the corporate structure to somehow make it compliant and then re-apply for a licence to operate?
4. Totally relocate to another location and juristiction while still accesssing the HK market? eg. SZX as others have suggested? (Could then be problems with mainland Chinese laws?)
5. Try to bring CX 'on board' or get them to buy in to some sort of JQHK franchise (which I doubt CX management would want to do and would throw up problems with existing partners).
6. Try to beef up the capacity of JQ Singapore & Vietnam and JQ Japan businesses and attempt to serve the mainland Chinese markets from surrounding countries?

Besides a whole lot of hot air from Alan Joyce its possibly not surprising that Qantas has not really given any indication yet as to what the future of JQ HK will actually be, except that its all "under review".

 

[trippin_the_rift]

Why has Alan Joyce got anything to do with JQ HK? I thought it was a HK business.

 

[Himeno]

4. Totally relocate to another location and juristiction while still accesssing the HK market? eg. SZX as others have suggested? (Could then be problems with mainland Chinese laws?)

How about ICN with OZ as partner (given the codeshare partnership QF has with OZ...).
They could try something like the RedQ thing again?
JQ Scandinavia with AY?