Jetstar Hong Kong plans to service Asian short-haul routes using its partners' local knowledge and successful, low-cost carrier models. The airline would operate in Greater China, Japan, South Korea and Southeast Asia, all within a five-hour radius of Hong Kong.

Jetstar would become the first discount airline operating short-haul flights out of Hong Kong.

Regarding ongoing air rights' negotiations between Hong Kong and Australia, Jetstar said it was a government-to-government negotiation and did not involve Jetstar. "As a Hong Kong airline, we have no plans to fly to Australia," the airline said.

Subject to regulatory approval Jetstar Hong Kong services would commence operations with a fleet of Airbus A320-200 aircraft, configured for 180 passengers in a single class. The carrier is expected to grow to 18 aircraft by the end of 2015. Jetstar Hong Kong promises fares 50 percent below existing full-service carriers. Jetstar Asia, which has been flying to Hong Kong and nine cities in China from Singapore, has created new travel demand in markets across Asia, because the airline's low fares enable people to fly more frequently.

Jetstar's aim is to offer affordable travel. The demographics of China with its burgeoning middle class are a key part of that plan. Jetstar hopes to capitalize on the enormous potential of that market, where the penetration rate of low-cost carriers is less than 5 percent.

Jetstar Hong Kong CEO Edward Lau says the airline, which will operate as a low-cost carrier, will have a higher asset utilization than full-service airlines. "Our planes will operate on average for 11 hours per day compared with the nine hours of full-service airlines," he says.

Lau said research conducted by the Public Opinion Program at the University of Hong Kong shows that nearly 70 percent of respondents intend to travel on a low-cost carrier in the next 12 months, despite LCCs representing only 6 percent of all flights into and out of Hong Kong International Airport.

Jetstar Hong Kong expects to contribute up to HK$8 billion to the Hong Kong economy yearly, once the carrier is fully operational and will generate more than 1,000 direct and indirect jobs.

(HK Edition 09/20/2013 page6)