An appetite for risk

The lessons from Jetstar Hong Kong

Jetstar Hong Kong has become a bit of a disaster. By now the latest Jetstar franchise should be flying a fleet of 18 A320s linking Hong Kong to ports across Asia such as Japan, Korea, and, most importantly, mainland China. Plus, Hong Kong would have been a mini-hub for Jetstar, where it could hub Jetstar Asia passengers from Singapore and Jetstar Japan passengers from Japan, plus Qantas mainline pax out of Australia.

Instead, what was to have been a growth vehicle in Asia for Jetstar and its Qantas parent has become a bit of a financial black hole and a point of some derision. Even before Hong Kong’s Air Transport Licensing Authority announced its long drawn-out decision in June to reject Jetstar’s application, the airline had progressively sold off eight of the nine brand new A320s it had been allocated to begin operations with – aircraft that would be costing Qantas and its joint venture partners in Jetstar Hong Kong China Eastern Airlines and Shun Tak Holdings hundreds of thousands of dollars each a month in financing costs.