Cathay plans to state opposition to Jetstar Hong Kong

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Cathay Pacific has expressed concern about the licence application of Jetstar Hong Kong and plans to issue a response in the next two weeks regarding the application.

"We are aware that Jetstar Hong Kong's license application has been published today in the Government of the Hong Kong Special Administrative Region Gazette," says Cathay in a statement. "We will give that application very close review over the two weeks that the regulations allow us to respond."

Cathay contends that Jetstar Hong Kong will be controlled by Jetstar Australia and its parent Qantas Airways, and thus contravenes Article 134 of Hong Kong's basic law. Cathay also feels the new carrier will hurt the local aviation industry and the Hong Kong economy. Cathay states that it will issue its views on Jetstar Hong Kong during the public consultation period.

Jetstar Hong Kong, for its part, says it will contribute up to Hong Kong dollars (HK$) 8 billion ($1.03 billion) to the local economy and create over 1,000 jobs. The carrier has three equal shareholders: local conglomerate Shun Tak Holdings, Qantas, and China Eastern Airlines.

Under Article 134, Beijing granted the Hong Kong government authority for four aspects involving air travel to and from the Hong Kong Special Administration Region (SAR), which was established when British colonial rule in Hong Kong ended in July 1997.

Three items pertain to traffic rights, while item two grants the authority to "issue licences to airlines incorporated in the HKSAR and having their principal place of business in Hong Kong."