Jetstar Hong Kong gets $US60 million China Eastern loan
China Eastern Airlines has extended a $US60 million loan to Jetstar Hong Kong at a time when the Qantas Airways-backed budget carrier has yet to receive regulatory approval to operate.
Qantas, China Eastern and Hong Kong’s Shun Tak Holdings each hold a one-third stake in Jetstar Hong Kong.
The loan from China Eastern was announced to the Hong Kong stock exchange last week. It will not change the ownership structure, but it means the budget carrier will be in the Chinese state-owned airline’s debt. Qantas has not extended any fresh equity or debt capital to Jetstar Hong Kong alongside China Eastern.
"Jetstar Hong Kong has the strong support of our shareholders as we move through the regulatory approval process towards launch, however does not comment about financial arrangements," a Jetstar spokeswoman said.
Qantas has $US66 million of equity invested in Jetstar Hong Kong, down from an initial $US99 million investment in 2012, due to the sale of a stake to Shun Tak last year.
Jetstar Hong Kong sold three of its nine Airbus A320 aircraft earlier this year and its board is understood to be considering the sale of a further three planes. That would leave it with three aircraft, the minimum believed to be needed to obtain its Air Operator’s Certificate.
The timing of the regulatory process is now unclear. Jetstar chief executive Jayne Hrdlicka in May declined to provide any targeted dates.