Strewth
Qantas doesn’t want to set up a domestic operation in Hong Kong so you point is mute. All flights to and from Hong Kong are international flights requiring the Hong Kong government to negotiate on behalf of all Hong Kong airlines the rights to operate these flights, including to mainland China. Domestic flights in Australia don’t require the Australian government doing any negotiation on behalf of the airlines that operate domestically.
Just because Hong Kong doesn’t have a domestic aviation market because of its physical size at 62km x 45km, doesn’t give Qantas the right to try and use it against them to have the law changed to suite their own financial reasons. If Qantas want to set up a Jetstar franchise here it has to be 51% locally owned period just like any Australian airline that wants to operate internationally out of Australia has to be 51% Australian owned. And for the record Virgin Australia was broken up into two companies to comply with this law. Virgin Australia (International) is 51% locally owned.
Yes Cathay and or Swire could set up a domestic airline in Australia. Again this is a direct result of Australia’s physical size which supports a domestic aviation market. Whether they want too though is another matter. They do though have about 300 pilots based in Australia that are willing and able to fly those planes if it was ever to happened. This would severely affect the profitability of Qantas’s cash cow domestic operations potentially pushing the whole group into a loss making situation that is terminal.