Budget airline Jetstar Hong Kong has sold six of its nine new Airbus A320s and many of its pilots have either quit or been redeployed even before its first commercial flight.
The airline’s license application is still pending 18 months after it was filed with Hong Kong regulators, Reuters reported Tuesday.
Jetstar is backed by Australia’s Qantas Airways and Shanghai-based China Eastern Airlines.
Budget airlines account for just 8 percent of the capacity out of Hong Kong compared with 30 percent in Singapore and 50 percent in Kuala Lumpur and Jakarta, according to industry consultancy OAG.
The stalemate in Hong Kong illustrates the pitched battle between full-service carriers and their faster-growing budget rivals in Asia for a share of the rising demand for air travel.
Flag carrier Cathay Pacific, which along with its subsidiary Dragonair accounted for 47 percent of the seats out of Hong Kong in 2014, has been quietly pressing regulators on the importance of shielding the homegrown airline, the report said.
Sources close to Qantas said Cathay’s opposition is the main reason behind the delay.
Other sources in Hong Kong, who are familiar with both Cathay Pacific and the government, could not say if the flag carrier was directly behind it.
However, one source said Cathay would do “everything it can” to stop Jetstar Hong Kong.
“We successfully compete for business in both Hong Kong and internationally each and every day,” the airline told Reuters in a statement.
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