Qantas is set to unveil a joint venture with China Eastern today which will create a new budget airline to be called Jetstar Hong Kong.
In a significant breakthrough into the northern Asian region, Qantas is expected to announce the Hong Kong joint venture with the Shanghai-based airline this morning at a press conference scheduled for 9.30am, AEDT. The new airline will use short-haul Airbus A320 aircraft, serving routes in Asia including China.
It will be modelled on Jetstar's other joint ventures in Asia. Last year Jetstar formed a joint venture with Japan Airlines to create Jetstar Japan, which will begin services later this year on domestic routes in the country.
Qantas's budget offshoot has its main Asian hub in Singapore, while it also has operations in Vietnam and New Zealand.
Jetstar's chief executive, Bruce Buchanan, has been talking up the airline's focus on north Asia over the last 18 months, including China.
China is already one of the largest tourism markets for Australia and has huge potential for growth in air travel as the size of its middle class swells.
The launch of a new budget airline in Hong Kong in partnership with the mainland Chinese airline will go some way to ease the pressure on Qantas, which ditched plans to launch a premium carrier in south-east Asia earlier this month. The expansion plan had been lauded as one of the main planks of chief executive Alan Joyce's strategy to turning around Qantas's premium international business.
The latest push into Asia, however, demonstrates that its expansion plans over coming years will rely heavily on Jetstar.