Asia Bizz: China Eastern Airlines and Australia-based carrier Qantas announced on March 26, 2012 that they will be launching a new Hong Kong based budget airline. It was announced that the budget airlines will be launched in the upcoming year and is aimed at making the most of the booming market of China aviation market. The new airline carrier will be named as Jetstar Hong Kong.

The new Asian carrier will fly on Asian routes including Japan, China, South Korea and Southeast Asia. The recent development marks the major expansion of Jetstar Hong Kong, of the Qantas budget brand, which at present flies in the domestic Australian and the Asian routes. The move also comes at a time when the carrier struggles to refocus its attention on Asia, which is now considered as the fastest growing aviation market.

Bruce Buchanan, the chief executive of Jetstar said that this is a unique opportunity to capitalize on the enormous potential of the Greater China market.

In Asia, the penetration of low-cost carriers is less than five percent. Buchanan added that Jetstar fares will be 50% less than the existing full service carriers, which has now created a new market demand in their markets across Asia as it enables people to make more trips often. Both carriers, Qantas and China Eastern, will have equal stake in the Jetstar Hong Kong and the company has even told the Australian Stock Exchange that the new airline would have maximum capitalization of US $198 million.

The Jetstar Hong Kong airline will be launched with a fleet of three Airbus A320s, but the number will be increased to 18 by the year 2015. Liu Shaoyong, the Shanghai-based China Eastern chairman said that they believe there are huge opportunities in the Jetstar low fare model throughout Asia which also includes the Greater China.