Stanley Ho’s Shun Tak buys into Qantas’ Jetstar Hong Kong joint venture

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AVIATION

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(From left) Jetstar chief executive Bruce Buchanan, Qantas chief executive Alan Joyce and China Eastern Airlines chairman Liu Shaoyong. Photo: Sam Tsang

Reuters in Hong Kong

Qantas Airways and China Eastern Airlines have sold a US$66 million stake in their budget airline joint venture to a Hong Kong-listed company, a move expected to pave the way for an operating licence.

Property-to-transport conglomerate Shun Tak Holdings, founded by Macau casino tycoon Stanley Ho, will take 33.3 per cent of Jetstar Hong Kong, which was launched last year but is still awaiting approval for its air operator’s certificate.

Partnering with a well-connected Hong Kong investor could help Qantas and China Eastern, which had targeted a launch date of mid-this year, allay regulatory concerns over whether Jetstar Hong Kong fits the criteria of being a local business, according to local media reports.

The new tie-up means Qantas, Australia’s flagship airline, China Eastern, the country’s No 2 airline by market value, and Shun Tak will each hold 33.3 per cent of Jetstar Hong Kong, which will have total capitalisation of US$198 million.

China Eastern and Shun Tak also said in statements the venture’s initial fleet plan comprised the acquisition or leasing, or both, of 18 Airbus A320s over the first three years of operation. The purchase of 18 Airbus A320s carries a catalogue price of US$1.65 billion.

The joint venture will give Qantas access to the fast-growing Chinese market and will look after China Eastern’s aspirations in the low-cost sector.

The business aims to tap rising demand not just from Hong Kong, which caters to around 40 million passengers a year, but also from greater China – a market that Qantas has said is set to see 450 million passengers by 2015.

Shun Tak Holdings

Qantas Airways

China Eastern Airlines

Jetstar Hong Kong