Australia’s Qantas Group and China Eastern Airlines have agreed to launch a new budget carrier for the Chinese market. The carrier, Jetstar Hong Kong, will be the first low-cost airline based in Hong Kong, according to Qantas.
Jetstar already runs budget airline services in other parts of Asia.
The expansion is in line with Qantas’ strategy to revive its international business.
Jetstar Hong Kong will start operation in 2013 with a fleet of three Airbus A320s, increasing it to 18 by 2015.
The two companies would be equal partners in the joint venture which will have $198m (£125m) in capital.
“The shareholding percentage in Jetstar Hong Kong will be equally held by China EasternAirlines and Qantas Group, which will be equal partners in the joint venture,” Qantas said in astatement on Monday.
Qantas Chief Executive Officer Alan Joyce said the new agreement would build a strongplatform for accessing the world’s largest, fastest growing and most profitable aviation market, adding, “We see tremendous potential for the Qantas Group in Asia and we are looking forward to working more closely with China Eastern Airlines to deliver on it.”
The Jetstar Group is owned by Qantas, which is hoping to tap into a growing market after seeing its international business suffer from increased competition.