"Violates basic law and undermines Hong Kong economy".
According to a release by Cathay Pacific, approval of the application for a licence to operate in Hong Kong by Jetstar Hong Kong would be a violation of Article 134 of Hong Kong’s Basic Law because Jetstar Hong Kong does not meet the requirement that it must have its principal place of business in Hong Kong.
Here's more from the press release:
That application was published in the Government of the Hong Kong Special Administrative Region Gazette and Cathay Pacific Airways can confirm that it has filed a formal objection to the application.
Public statements previously made in Australia by Jetstar and its parent company Qantas Airways make it clear that Jetstar Hong Kong is a franchise of Jetstar in Australia and that management control of Jetstar Hong Kong would rest in Australia with Jetstar and Qantas Airways.
This means that Jetstar Hong Kong’s principal place of business would be in Australia, not Hong Kong.
The Hong Kong residence of a particular shareholder of Jetstar Hong Kong and the number of shares held by that shareholder do not determine management control or principal place of business under the Basic Law.
Nor does the fact that particular officers of Jetstar Hong Kong are residents in Hong Kong. Any local franchise operation has local managers.
This does not stop it from being controlled from overseas. Management control of the Jetstar Hong Kong franchise clearly rests in Australia.
Our position that Jetstar Hong Kong does not meet the Basic Law requirement to have its principal place of business in Hong Kong is backed by strong legal advice.
In addition to violating the Basic Law, approval of this application would set a dangerous precedent by granting control of Hong Kong’s hard-negotiated sovereign air traffic rights to a carrier that is nothing more than a franchise operation controlled by a foreign airline.
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