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Jetstar to launch Hong Kong based carrier

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Jetstar to launch Hong Kong based carrier

Old 3rd Jul 2014, 00:21
  #181 (permalink)  
 
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..and if Jetstar HongKong has any staff who understand the Jetstar / LCC business model, then Eastern will poach them.

Its a lethal technique in Asia - offer your competitors critical staff a tiny equity stake in your business and they will always jump ship. Ownership is a very powerful incentive in Asia.
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Old 3rd Jul 2014, 02:30
  #182 (permalink)  
 
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Sunfish.

Word is that the intellectual property has already left the JQ HGK building.

I don't know numbers but believe there is only a handful of people left in HKG in a last ditch effort to get JQ HKG approvals.

MC.
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Old 3rd Jul 2014, 08:56
  #183 (permalink)  
 
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Jetstar Hong Kong - evaporating raison d'etre

This announcement by MU, is another harbinger of doom for JHK. It joins a long list of increasingly pessimistic markers for the embattled wannabe in HKG.

First mover advantage has now gone. Hong Kong Express has taken the yellow jersey and is the first LCC domiciled in the fragrant harbour.

Slots get ever more constrained as the 'noise lobby' grows increasingly powerful and the incumbent carriers expand into, and soak up the available capacity at CLK.

The Jetstar pan-asia strategy is visibly struggling. Jetstar Asia is unprofitable. Jetstar Pacific is a political nightmare. Jetstar Hong Kong is a distant dream. Jetstar Japan is slow and problematic. I won't mention the issues emerging with the Jetstar mothership in Australia and New Zealand. And, of course, we are all abundantly aware of the existential problems that Qantas faces.

All of which shines a very bright light on the implications from this announcement by MU that they are going it alone with the development of a LCC in China. It has long been my view that Jetstar Hong Kong was a beach-head operation. An opening ambit. A foothold on the mainland. A way of gaining access to the Peoples Republic of China.

As we all know, the growth potential of the PRC is gigantic. I have long suspected that Jetstar saw the Hong Kong operation as a first step toward the ultimate goal - spawning their franchise into China. China Eastern was seen as a suitable partner - not only because Cathay spurned Qantas, but because MU presented access to China.

Therefore, the announcement that China Eastern is now 'going it alone' with a LCC in China, is the starkest evidence yet that MU has lost confidence in the ability of Jetstar to deliver on their undertaking to establish an airline in Hong Kong.

In a world of rational self-interest - Jetstar was using China Eastern (for local credibility and market access) and China Eastern was using Jetstar (for know-how). Now that it has become evident that Qantas and Jetstar lack the requisite know-how - China Eastern have quite rightly decided to go it alone.

Perhaps Qantas could come to an arrangement with China Eastern; to sell them all the surplus airframes that are dotted around France. That way MU gets it's LCC up and running quickly and Qantas/Jetstar are able to reduce the burden of countless idle aircraft???
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Old 3rd Jul 2014, 09:13
  #184 (permalink)  
 
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Hials:

As we all know, the growth potential of the PRC is gigantic
NO! NO! NO!

The growth potential for Chinese owned and controlled businesses is gigantic.

The growth potential for non Chinese businesses that do not have ironclad control of their intellectual property or another barrier to entry is flat effing ZERO!!!!

How do I get this message through the thick heads around here? The only people in China allowed to make money out of other Chinese are Chinese!

Even if Jetstar HK was ever established, the chances of it (a) making a profit and (b) repatriating that profit to Australia are plain ******* zero! There is no way Jetstar HKG can ever make a profit for the Qantas group, at best you might get one dollar more than you invested.
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Old 3rd Jul 2014, 09:19
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I disagree.

It's not about the Chinese. This is an issue of Australian failure.

China Eastern is simply moving on - having been victims of an abject failure by the Australians to produce what they promised.

The partnership fidelity of MU has never been tested. The Australians let them down.

Last edited by HIALS; 3rd Jul 2014 at 09:24. Reason: grammar
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Old 3rd Jul 2014, 10:29
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Hials, my family has traded with Asia since 1935. There is a wealth of experience, often bitter, to back up my contention.

For the record, that is that every cent Qantas puts into Asia will be lost because people like you think that Asians think like Westerners and have the same values; they don't.

It is possible to make money in Asia, but not with the Qantas mindset. To make money, plan to spend many millions over Twenty or more years with no prospect of reward to establish relationships.

Just jumping in and announcing you are open for business, as Qantas has done, will get you exactly what Jetstar has got; zero.

P.S. Relationships with not just anybody, I watched an I.T. company waste $3 million on a tender for a non existent I.T project brought to it by "the nephew of the Chinese Minister". F.F.S. Australian companies are wood ducks when it comes to dealing with Asia, start with Rio Tinto, then look at various coal companies.
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Old 3rd Jul 2014, 10:34
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Are you Sue Wilkins?

Whatever the merits of your arguments might be - they are lost. You are a vitriolic racist.

Last edited by HIALS; 3rd Jul 2014 at 10:35. Reason: spelling
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Old 3rd Jul 2014, 10:35
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There is no question the idiots running QF/Jet* would have contributed to any failure, but I would argue the Chinese Govt saved them from a more catastrophic long term failure by (how can I put this most politely?) a very, very detailed consideration of any regulation that might ever affect the operation. Especially when said regulators would have been all too aware that their careful consideration was sending idiots with bigger egos broke. Much as I would like to lay blame on the most incompetent bunch of Australians since fund managers loaded up on Bond Corp, I cannot and most could not see regulatory approval ever happening. They should be taken out and shot for trying it on, but blaming them for failing after deciding the idiotic thought bubble might be a good idea is being a bit harsh.

I think as Sunfish pointed out, it is extraordinarily lucky for the Coward St Muppets that the Phantom Airline is mostly parked in Europe and not China.


HIALS: I might be so bold as to suggest Sunfish is not a Vitriolic Rascist, more an analyst with a keen interest in nationalistic business perceptions. I see nothing other than experience based on facts (certainly nothing I have seen suggests he is wrong with his assumptions) being pointed out. Most nations I feel are similar, the Chinese simply have more money thrown at them than others....
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Old 3rd Jul 2014, 10:35
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Hials, my family has traded with Asia since 1935. There is a wealth of experience, often bitter, to back up my contention.

For the record, that is that every cent Qantas puts into Asia will be lost because people like you think that Asians think like Westerners and have the same values; they don't. this is not just an Australian problem either.

It is possible to make money in Asia, but not with the Qantas mindset. To make money, plan to spend many millions over Twenty or more years with no prospect of reward to establish relationships.

Just jumping in and announcing you are open for business, as Qantas has done, will get you exactly what Jetstar has got; zero.
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Old 3rd Jul 2014, 10:44
  #190 (permalink)  
 
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Hials, you are a fool. Asia is not Europe. Western values are not Chinese values. It is not racist to say so.

In Asia face is everything, it is an insult to refer to a written contract or to require someone to sign one.

Relationships are everything. You do not do business like you do in Sydney.

There are business ethics in China, but they are not your Western ethics. In some ways they are tougher, in others looser.

If you do not understand these things then God help you. I have one friend who suicided over a failed Asian venture and a few acquaintances who lost their shirts the same way.

If you think that its racist to try and explain that you are dealing with a culture that has different values, then more fool you.
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Old 3rd Jul 2014, 11:00
  #191 (permalink)  
 
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Sunfish you lose credibility when you throw your toys out of the pram and resort to name calling simply because someone has a different view to yours. Yes you can sprout about your families 80 years of experience in business with "Asia", and in this environment you will be supported by the anonymous masses because you are attacking the employer everyone hates at the moment, but let others have there view as well.
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Old 3rd Jul 2014, 11:25
  #192 (permalink)  
 
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Sunfish is in the money.

For the record, sunfish is Asian
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Old 3rd Jul 2014, 12:11
  #193 (permalink)  
 
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HIALS,you might start by reading "Taipan".
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Old 3rd Jul 2014, 12:18
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HIALS,sorry,the Author is James Clavell.
"The only thing new in the world, is the history you don't known yet"
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Old 3rd Jul 2014, 12:24
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I think the one high profile businessman in Australia who actually understands the game the Chinese like to play is Clive Palmer. From the ramblings it seems like Citic Pacific came here and tried to take Clive Palmer's mining leases for what they worth and got played for all they're worth in return. In getting burned big time they are trying to take him down on a technicality relative pocket money that's been allegedly misappropriated.

But at least Citic got a mine out of it

Seems to me that Qantas didn't get anything out of Jetstar HKG, just the opportunity to do some LCC ground work with an interested partner, MU, who then decided to start up their own LCC. Seems like MU did well out of this, saved them a lot of R&D and groundwork.
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Old 3rd Jul 2014, 15:25
  #196 (permalink)  
 
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Gasbags:

resort to name calling simply because someone has a different view to yours.
Its not opinion, its fact. Ask any of the Thousands of Westerners who have lost their shirt in trying to invest in China. You require a great deal of patience, very deep pockets and eyes in the back of your head. Qantas displays none of these traits.
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Old 3rd Jul 2014, 23:13
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We seem to have degenerated into a petty argument when really it seems everyone is agreeing. Doing business in Asia is different from western cultures; not better or worse, just different. Whichever way you look at it, QF have been played in their JQ Asian ventures. Through a combination of stupidity, arrogance and hubris they have managed to lose and continue to lose millions.

Jetstar Hong Kong has been terminal for months and MU's announcement just confirms it. If QF's auditors are any good, they will be demanding that Qantas write off their entire investment as part of the FY14 accounts because it is unlikely this money will ever be recovered.

AJ's pipe dream of an Asia wide Jetstar operation returning millions to QF is now shown to be the pipe-dream it always was. He could have made much more money properly developing Jetstar and reinvigorating mainline here in Australia. Instead, he has left these businesses moribund with little strategy and has been attacked from competitors who sensed the weakness. In years to come, people will get MBAs writing thesis about the mismanagement that has go on in Mascot.
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Old 3rd Jul 2014, 23:31
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If QF's auditors are any good, they will be demanding that Qantas write off their entire investment as part of the FY14 accounts because it is unlikely this money will ever be recovered.
That would fit perfectly into the "the sky is falling in", faux Chapter 11 narrative. Of course, creative, I mean segment accounting allows the write-offs to be mimised & masked [saving face] via transmutation onto other business segments. The true losses in Asia will never be publically admitted under the AJ/LC administration, possibly ever.

If you are going to have a bad year, make it a shocker. Think of it as a toxic waste barge allowing the all the trash to be floated away in one go. And never let a crisis go to waste.
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Old 3rd Jul 2014, 23:58
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You are a vitriolic racist.
Bull**** he is, and your comment is idiotic. Grasping for something when you've got nothing. You've got no argument so you scream rascist knowing that other uneducated idiots will brand people.
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Old 3rd Jul 2014, 23:59
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This being the first week of FY 15, I find MU's timing interesting, are they hoping to achieve maximum damage to QF ?
It would appear that Qf were going to write down as many losses as they
could during FY 14, making FY 15 appear to be the start of the 'miraculous' turn-around.

The end of any hope for JHK would have to be the worst possible way to start the new financial year.

Can they attribute the losses of winding-up JHK to FY14 when they gave no such guidance to the market that this was a possibility ? I don't know.

In respect to Sunny's observations, they all seem to come true, unfortunately.
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