Strewth
The spokesman said that when the Government considers an airline's application, the requirements of being incorporated and having its principal place of business in Hong Kong and the airline's shareholding structure are the factors that would be taken into account, but those are not the sole determining factors.
An applicant for a HK AOC must meet all those requirements, so let’s look at them individually.
1. Incorporated in Hong Kong. No problem here.
2. Principal Place of Business in Hong Kong. Jetstar Group CEO is quoted as say she is running 6 franchise airlines. She is also quoted as saying our airlines. The terms “Running”, “Franchise”, and “Our” are very damming words for Jayne Hrdlicka to use. They go to the heart of the issue of where control lies. In all franchises the franchisor is involved in securing protection for the trademark, controlling the business concept and securing know how. The franchisee is obligated to carry out the services for which the trademark has been made prominent or famous. The franchisee is also responsible for 100% of the startup costs and ongoing fees to the franchisor. This puts in doubt whether it is a franchise or infact a subsidiary which is even more damming for Jetstar’s application.
3. The airlines shareholding structure. There is a very good reason why every single airline that is/has been based in Hong Kong since 1997 has had majority Hong Kong ownership. With only 33% local ownership it would appear Jetstar Hong Kong will fail this test as well.
4. Other determining factors. What was the intent of the Basic Law? Does it provide a long term or short term benefit to Hong Kong? Does granting Jetstar an AOC in Hong Kong set a dangerous precedent by opening the flood to any foreign airline wanting to set up an airline in Hong Kong, something that the Basic Law suppose to prevent?
Not to discredit the gentleman’s opinions. However, regarding Andrew Pyne, you have mentioned one but their is another elephant in the room.
The courts could ultimately decide if Jetstar gets an AOC in Hong Kong if the regulator knocks back their application but the reality is that the courts here very rarely go against the government’s interpretation of the basic law.