Hong Kong conglomerate Shun Tak Holdings will take a 33.3% stake in Jetstar Hong Kong, only days after the government announced that it is reviewing its criteria for local carriers.
Following completion of the transaction, Qantas, Shun Tak, and China Eastern Airlines will each hold 33.3% in the proposed low-cost carrier, says the Australian flag carrier in a statement.
It adds that the capitalisation of Jetstar Hong Kong will remain at $198 million, with the Shun Tak deal reducing Qantas's investment from $99 million to $66 million. China Eastern and Shun Tak will also contribute $66 million each to the venture.
"Shun Tak's long history in tourism and transportation businesses will further deepen the experience behind Jetstar Hong Kong," says Jetstar Hong Kong chief executive Edward Lau.
"As Hong Kong's only local low-fares airline, having a strong local partner in Hong Kong like Shun Tak, who understands the revolution we want to bring to Hong Kong air travel, is of great benefit."
Shun Tak says that the investment in the LCC "will lay a foundation for the company in establishing broader cooperation and future development with partners in the aviation industry"
Announcement of the Shun Tak investment comes shortly after the government said that it would suspend applications from new airlines while it reviews the regime for designating local carriers. That raised the prospect that the budget carrier would further delay its plan to launch services in the second half of this year.
Prior to announcing the review, some government officials expressed concern that Jetstar Hong Kong may not meet local ownership requirements to be designated a Hong Kong-based carrier.
Jetstar Hong Kong says, however, that it is "progressing with regulatory approvals and is confident of approval before the end of 2013".
The budget carrier aims to have a fleet of 18 Airbus A320s by the end of 2015 and will serve destinations in China, Southeast Asia, Japan and South Korea.