HONG KONG (AP) — Australia’s Qantas and China Eastern Airlines Co. say they are teaming up to launch a Hong Kong-based, low-cost airline aimed at accommodating the swelling ranks of China’s middle classes.
The companies said Sunday that they will be equal partners in a joint venture that will start operating in 2013 under Qantas Airways Ltd.’s Jetstar budget brand. The new carrier will fly short-haul routes to China, Japan, South Korea and Southeast Asia.
Jetstar Hong Kong will start with three Airbus A320s, and add 15 more by 2015. Qantas and Shanghai-based China Eastern will each invest $57.5 million, which could rise to $99 million.
Qantas executives said the venture is an opportunity to “capitalize on the enormous potential of the Greater Chinese market,” which includes Hong Kong, Macau, Taiwan and the mainland.
“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,” Jetstar Group’s Chief Executive Officer Bruce Buchanan said in a statement.
China’s airlines handled 292 million passengers last year, and those numbers are forecast to grow to 450 million by 2015, according to estimates by the country’s civil aviation authorities.
The new airline is the latest in a number of budget carriers being launched around Asia, the world’s biggest and fastest growing air travel market. It will also fill a gap in China’s booming market, which has hardly any discount airlines.