Cathay and Dragonair blast Jetstar bid to fly in Hong Kong

Claim Jetstar doesn’t have its principal place of business in HK.

Cathay Pacific and sister-company, Dragonair, both based in Hong Kong, have formally objected to the Hong Kong government over Jetstar Hong Kong’s application for a license to operate. Both carriers claim the approval of Jetstar Hong Kong’s application would violate basic law and undermine Hong Kong’s economy.

Cathay Pacific and Dragonair bluntly said the violation would occur because under Hong Kong’s Basic Law Jetstar Hong Kong does not meet the requirement that it must have its principal place of business in Hong Kong.

“Public statements previously made in Australia by Jetstar and its parent company Qantas Airways make it clear that Jetstar Hong Kong is a franchise of Jetstar in Australia and that management control of Jetstar Hong Kong would rest in Australia with Jetstar and Qantas Airways. This means that Jetstar Hong Kong’s principal place of business would be in Australia, not Hong Kong,” Cathay Pacific said in a statement.

Cathay Pacific claims the Hong Kong residence of a particular shareholder of Jetstar Hong Kong and the number of shares held by that shareholder does not determine management control or principal place of business under the Basic Law.

“The reality is that, by its own admission, Jetstar Hong Kong is a franchise of a foreign airline which is also controlled by that foreign airline. The setting up of Jetstar Hong Kong is an attempt by a foreign carrier to gain access to Hong Kong’s pool of traffic rights without a fair exchange of value to Hong Kong.”