Strewth
Cathay Pacific reached capacity on an agreement between Hong Kong and Australia. Why the Australian Government would agree to further expand capacity, considering Australian Airlines have not is best explained in a report by David Flynn in the ABT and Fairfax reporter Matt O’Sullivan.
What has capacity rights between Australia and Hong Kong got to do with Jetstar Hong Kong? It is irrelevant to the debate at hand and a distraction by you along with most of your arguments. If Qantas find it hard to fill aircraft then that’s their problem. Cathay certainly doesn’t and could easily fill additional flights if capacity was increased.
Cathay’s Chief Operating Officer, Ivan Chu believes:
"At the end of the day the governments should look after the public interest, and expansion will provide more public interest. If there is more capacity, we will take advantage of that”.
This statement is inline with an Agreement between the Government of Hong Kong and the Government of Australia for the Promotion and Protection of Investments. In respect to this agreement Article 135 is interesting.
I suggest you read Article 135 again and think about it. Article 135 has nothing to do with it.
IATA estimates by 2015 to see an additional 840 million travellers in Asia. A future ASEAN open skies agreement and the degree of freedoms would also indicate a benefit to HK having a number of LCC based in the city. Why should HK and it’s people not benefit.
CX has already stated it has no problem with competition from LCC or any other airline. It already competes with 107 airlines in the Hong Kong market including 17 LCC’s. The only thing that will slow down much more competition is the capacity of HKIA.
On average LCC take approximately 30% of the aviation market, however in HK it’s less than 6%.
That is only because of the late take up of LCC in Asia. Your 30% figure is greatly distorted by the percentage of pax using LCC in Europe and North America. The reason only seventeen LCC’s operate into HKIA is because of the cost of operating here. The reason LCC’s are so successful in Europe and North America is that they generally operate into secondary airports. I won’t even get started about the propensity of secondary airport owners in Europe to pay the LCC’s to operate there.
Previous statements made in relation to the negotiation of rights of airlines based in the HKSAR and the P.R.C are dealt with in Article 131.
All air services agreements involving HK carriers and mainland carriers operating between HKSAR and PRC is done in consultation with the HKSAR government as per Article 131. The reality is that most air services agreements for HKSAR carriers are negotiated under Article 133, this includes between HKSAR and Australia.
Qantas has a 33% interest in Jetstar Hong Kong Airways joint venture. This is well below the 49% foreign owned limit. The argument made in relation to this is debatable, however the Sovereignty of the HKSAR is not. I guess the interest of the people Hong Kong will answer the debate.
Jetstar Hong Kong is 66.6% owned by foreign airlines, i.e. 33.3% by Qantas and 33.3% by China Eastern. By its own admission Jetstar Hong Kong is a franchise airline of Jetstar and controlled by Jetstar and Qantas in Australia. Please enlighten me how this business model complies with Hong Kong’s Basic Law. The business model proposed clearly indicates that its principle place of business is in Australia where control will be centred. I also seem to recall the Australian regulator CASA grounding Tiger Airways Australian franchise because control was in Singapore with the parent company rather than in Australia. Pretty hypocritical of Qantas to try and do the same thing in Hong Kong which was clearly unacceptable in Australia.