Jetstar Hong Kong article in The Age

[AdMEL]

Interesting article in The Age:

It's destination Hong Kong - and at any price

I did not realise there were so many Jetstar's! Jetstar Australia, Jetstar Asia (Singapore), Jetstar Vietnam, Jetstar Japan and Jetstar Hong Kong! I wonder how many more are planned?

QF certainly seem to be pinning their fortune on Jetstar, a strategy that appears to have only had limited success in Asia so far.

 

[samh004]

There's also Jetstar NZ

It's not a bad strategy, but the issue is keeping some control over overseas entities while also appearing like you're not in control, per local laws. That's the issue for Hong Kong right now.

 

[Awesom Andy]

Jetstar Australia has been somewhat successful as it took over some of QFs routes.
Jetstar Asia is actually a pretty high cost airline in SIN, compared to its competitors (Tiger and AirAsia).
Jetstar Pacific (Vietnam) is and will always be hampered by the government, where the business culture depends more on connections and face rather than the strictest definition written on the contract... and the government owns Vietnam Airlines so you'll always be in trouble if you out-perform them.
Jetstar Japan just started so it's too early to judge, but while Japanese can admire good foreign brands, they generally prefer something home-grown - even if it's an imitation of the foreign brand (assuming they can't make improvements on it).
Jetstar Hong Kong... given the late Australian government's treatment of Chinese investments in Australia, I would suspect that, if they are allowed to fly at all, operations would be severely restricted. Although, ignoring that fact, if they keep using gates 511-513 and sending the pax on busses, it would be very difficult to make it work. I fly SIN-HKG at least monthly, and I've never seen a turn-around in the scheduled 45-minute mark - it usually ends up with 60min of idle time.

 

[markis10]

Jetstar Pacific (Vietnam) is and will always be hampered by the government, where the business culture depends more on connections and face rather than the strictest definition written on the contract... and the government owns Vietnam Airlines so you'll always be in trouble if you out-perform them.

No chance JQ Pacific will outdo Vietnam Airlines, 70% of the airline is owned by Vietnam Airlines.

 

[anat0l]

Interesting article.

No doubt the protectionism and strong non-liberal regulation in both Hong Kong and China will prove to be significant hurdles to be overcome. And without some lobbying power, twisting of ethical behaviour and/or paying a few people off, it's going to be a real loaded dice situation for sure.

 

[moa999]

No chance JQ Pacific will outdo Vietnam Airlines, 70% of the airline is owned by Vietnam Airlines.

You mean the government also owns 70% of Jetstar Pacific.. At one point different government agencies owned the 70% of Jetstar Pacific and 80% of Vietnam Airlines, but this was changed in 2012

 

[markis10]

You mean the government also owns 70% of Jetstar Pacific.. At one point different government agencies owned the 70% of Jetstar Pacific and 100% of Vietnam Airlines, but this was changed in 2012

No I mean Vietnam Airlines which has the 70% stake holding after SCIC transferred their shares in Feb 2012.

WebCite query result

The Vietnam Government only holds 80% of Vietnam airlines and is planning on reducing this:

http://investvine.com/vietnam-airlines-gets-complete-overhaul/

 

[yohy?!]

The real fear for CX is not JQ HK but all the mainland chinese airlines being able to setup shop in HK and put them out of business effectively.

 

[anat0l]

The real fear for CX is not JQ HK but all the mainland chinese airlines being able to setup shop in HK and put them out of business effectively.

They seem to be approaching this argument from a precedent standpoint, i.e. if we let JQHK in like this, then the other Chinese airlines will necessarily follow suit.

However, it seems that the environment within HKG suggests that it's still highly protectionist and Cathay has significant lobbying power. So even if a "precedent" was set it would come mostly to nought, unless the mainland Chinese government can then enforce or compel that precedent upon the Hong Kong SAR.

Of course, Cathay is going to defend its own market share (particularly with the high traffic with mainland China) and rights with might and main, using all of its available lobbying power and taking advantage of any protectionism (if any) it has been afforded. If this means squashing JQHK then so be it. Precedent would be one reason but I would imagine, in a practical sense, a small one.

 

[yohy?!]

unless the mainland Chinese government can then enforce or compel that precedent upon the Hong Kong SAR.

Not sure I understand what you're getting at here - it would just be a matter of the mainland carriers asking for this to be enforced if HK did not comply, no?

Not sure if you are aware but the Beijing Liaison Office is basically in charge here now.

 

[samh004]

I was looking at Macau from high above (Google Maps) and other than the relatively poor airport offering, I'm not sure why they didn't decide to set up base there instead. Just as good an entry point into China, lots of casinos and money, and a short ferry ride to Hong Kong that could very easily be bundled with an airfare?

 

[kamchatsky]

I was looking at Macau from high above (Google Maps) and other than the relatively poor airport offering, I'm not sure why they didn't decide to set up base there instead. Just as good an entry point into China, lots of casinos and money, and a short ferry ride to Hong Kong that could very easily be bundled with an airfare?

That is because no Hongkongers would catch the ferry to Macau to fly off, when it is so much more convenient to travel to HKG airport. It is almost easier to travel to Shenzhen Baoan airport using subways than going to Macau airport if you want cheap fares.

 

[samh004]

That is because no Hongkongers would catch the ferry to Macau to fly off, when it is so much more convenient to travel to HKG airport. It is almost easier to travel to Shenzhen Baoan airport using subways than going to Macau airport if you want cheap fares.

I'm not sure, if it could be worked so there was only one customs/immigration checkpoint and the ferry went directly to the terminal/central in HK... I don't think it would be too bad. Those that want cheaper flights can put up with that.

 

[anat0l]

I was looking at Macau from high above (Google Maps) and other than the relatively poor airport offering, I'm not sure why they didn't decide to set up base there instead. Just as good an entry point into China, lots of casinos and money, and a short ferry ride to Hong Kong that could very easily be bundled with an airfare?

Never underestimate the effect of a non-direct option.

In other words, if more people could just transfer directly at HKG, I think they'd prefer that. Not to mention there's a lot of posture in setting up at HKG (and surviving beyond Oasis), but as mentioned, it's an expensive place to do business.

Otherwise, why not consider a base in Shenzhen?

 

[moa999]

Probably because whilst a foreigner has some chance of owning a small part of a Hong Kong based airline, they have no chance of owning a China based airline

 

[yohy?!]

Presumably if Macau would work (and historically it doesn't ie Viva Macau) - Shun Tak and Pansy Ho (now JQ Hk Chairwoman) would have done it already

 

[docjames]

I think within HKG there needs to be less visible QF execs and more of Patsy Ho and emphasising jobs based in HKG.

 

[dk4]

Probably because whilst a foreigner has some chance of owning a small part of a Hong Kong based airline, they have no chance of owning a China based airline

You don't think that the end game position, is Qantas hoping to impress Beijing sufficiently, with its behaviour in Hong Kong, that a Chinese Jetstar franchise (majority owned by China Eastern) is granted rights to operate from mainland hub(s)?

 

[Simo]

JQ HK will probably get 787 before QF...

 

[anat0l]

JQ HK will probably get 787 before QF...

I doubt it unless JQHK can find a killer route to exploit on its operations. Then, you weigh up - capacity or frequency...