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Jetstar’s Hong Kong affiliate has sold two more of its Airbus A320s as it waits for a decision from local authorities on whether it will be granted a licence to fly.
The two aircraft have been sold to a Chinese company CMB Financial Leasing Co for US$83 million, Jetstar Hong Kong part-owner Shun Tak Holdings told the Hong Kong Stock Exchange on Friday.
“As the establishment of Jetstar Hong Kong is taking longer than initially expected, the sale of aircraft under the Aircraft Sale Agreements will optimize the fleet plan in the short term,” the Shun Tak statement said.
“The proceeds from the sale will be used for repayment of debt and for general working capital purposes of Jetstar Hong Kong.”
Shun Tak, Qantas and China Eastern each own one-third of Jetstar Hong Kong.
The Hong Kong’s Air Transport Licensing Authority was currently considering the airline’s application for an operating licence and held an inquiry to consider the matter in January.
The authority will determine if Jetstar Hong Kong satisfies the nation’s principal place of business laws and therefore is able to access international traffic rights as a Hong Kong-designated carrier.
“That hearing, we expect to hear some conclusions from it over the next few months. We continue to be positive, as the management and board of Jetstar Hong Kong are,” Qantas chief executive Alan Joyce told reporters at the company’s first half results presentation in Sydney on February 26.
Jetstar Hong Kong has now sold eight of its nine A320s as it waits for approval to fly.
The proposed low-cost carrier has met fierce opposition from Hong Kong Airlines and Cathay Pacific, who both have argued Jetstar Hong Kong did not meet the principal place of business requirements contained in Hong Kong’s Basic Law, arguing all major decisions will be made by Jetstar’s Melbourne head office.
In response, Jetstar Hong Kong has said it had local management, a Hong Kong chief executive and was run and managed by a separate board. Following a change to the shareholder voting structure in 2014, Shun Tak holds a majority 51 per cent of voting rights, with Qantas and China Eastern having 24.5 per cent voting rights. Ownership levels were unchanged at 33.3 per cent each.
