BY JAMES WILKINSON
Tourism Australia is hailing Jetstar’s new partnership with China Eastern Airlines to form a Hong Kong-based carrier a big win for inbound tourism.
Set for take-off: a new Jetstar will be based in Hong Kong
The launch of Jetstar Hong Kong, a joint venture between Qantas Group and China Eastern, the world’s ninth largest airline by number of passengers carried, will see services launch in 2013 with a fleet of three Airbus A320s.
“As an industry in transition but, importantly, one whose future growth strategy is so closely aligned to the powerhouse markets within Asia, the improved capacity wrapped into this deal is good for Australian inbound tourism,” said Tourism Australia’s Managing Director, Andrew McEvoy.
“Last year, we announced a long term Memorandum of Understanding with Jetstar which was all about growing inbound visitors from Asia and this gives Australia even more ability to tap into this rich vein of growth.
“China Eastern is also a significant Tourism Australia partner and this will further enhance the relationship,” he said.
Jetstar Hong Kong will become the sixth operation for Qantas’ low-cost offshoot, alongside Jetstar Australia, Jetstar New Zealand, Jetstar Asia (Singapore), Jetstar Pacific (Vietnam) and Jetstar Japan, which is launching this year in partnership with Japan Airlines.
According to Qantas Group Chief Executive Officer, Alan Joyce, Jetstar Hong Kong will grow from its initial base with three aircraft to 18 Airbus A320s by 2015.
He said the agreement with China Eastern would help Qantas Group “build a strong platform for accessing the world’s largest, fastest growing and most profitable aviation market”.
“We see tremendous potential for the Qantas Group in Asia and we’re looking forward to working more closely with China Eastern Airlines to deliver on it,” he said.
“Establishing Jetstar Hong Kong in the heart of Asia and on the doorstep of mainland China is a historic opportunity to continue the successful expansion of the Jetstar brand in this region.
“We know from our experience with Jetstar in Australia and in the setup of Jetstar Japan the benefits of both a premium and a low cost airline operating in the same market.
“This will also apply to Jetstar Hong Kong, which will leverage the local knowledge and scale of China Eastern Airlines with the successful low cost model of Jetstar,” Joyce said.
China Eastern Airlines’ Chairman, Liu Shaoyong, said he believed there was enormous potential for Jetstar Hong Kong, which will become the first low-cost airline to be based in Hong Kong and the second in Greater China.
“We believe there are huge opportunities for the Jetstar low fares model throughout Asia, including Greater China, and are excited to be the first major Chinese carrier to bring this travel option to the region,” Liu said.
“Cooperation with Qantas Group is a key step in China Eastern Airlines’ international expansion strategy and an excellent opportunity for China Eastern Airlines to develop low cost carrier operations to complement its existing business model.
“Jetstar Hong Kong’s low fare model will enable people to fly more often for less and will help to stimulate the Hong Kong tourism industry and the broader economy,” he said.
In what is set to trigger a price war, Jetstar Group’s Chief Executive Officer, Bruce Buchanan, said Jetstar Hong Kong’s fares “will be 50 per cent less than existing full service carriers, which we’ve seen create new travel demand in our markets across Asia because it enables people to take more trips, more often”.
“Jetstar’s vision is to make travel more affordable for millions of people across Asia, and the demographics of China with its booming middle class are a key part of that plan,” he said.
“This is a unique opportunity for Jetstar to capitalise on the enormous potential of the
Greater Chinese market, where the penetration rate of low cost carriers is less than 5%, using a model that we know delivers for customers and shareholders.”
According to Tourism Australia, China is Australia’s “fastest growing and most valuable international tourism market, with 558,000 visitors from China for the twelve months to January 2012, a rise of just under 20%”.