Jetstar Hong Kong is group's largest launch challenge yet but with a tremendous potential upside

No pain, no gain as the saying goes. Jetstar's proposed joint venture in Hong Kong, Jetstar Hong Kong, has the potential to unlock a region bereft of leisure travel and lower fares. Routes will include mainland China, expanding Jetstar's footprint there, but also to North and Southeast Asia, allowing Jetstar to gain synergies and scale with its operations in Japan, Singapore and perhaps Vietnam. Unlike Japan, it will not have a high-profile competitor in the form of AirAsia or Peach.

But these potential rewards will not come easy. Its strategic and equity partner China Eastern has different ambitions from the Jetstar and Qantas Groups. Already the two sides have had differing messages and the launch is protracted and will take over a year compared to the 11 months for Jetstar Japan. There are external challenges too: while hometown carrier Cathay Pacific takes a contentious view that LCCs will not affect its business, it is making clear Jetstar Hong Kong should not gain approval. The discussions go beyond tiny Hong Kong into the murky cabal that is Beijing politics.