China Eastern Airlines Co Ltd, one of the nation's major three carriers, may expand its joint-venture budget operation Jetstar Hong Kong to the Chinese mainland within three years.
Jetstar, a 50/50 joint venture between China Eastern and Qantas Group, Australia's national carrier, is expected to play a key part in China Eastern's finances over the coming years, said Ma Xulun, the president of the company.
"We are eyeing the mainland market within three years, around the point at which we expect Jetstar Hong Kong to become profitable," Ma, an NPC deputy from Shanghai, told China Daily on the sidelines of the annual session of the 12th National People's Congress.
China Eastern launched the partnership with Qantas in March last year, with both sides agreeing to invest up to $198 million over three years.
An application to launch the budget carrier was approved by the Ministry of Commerce in January, according to Ma, and the fleet is ready for takeoff later this year once it obtains an operating license from Hong Kong's airlines regulatory body.
Ma said he and his Australian partners have been mulling the expansion since the start of the negotiations.
They agree the Hong Kong-based operation will test the water for further exploration into the mainland's lucrative, but largely untapped, budget airline market.
Ma said he is also hopeful that the new venture will help improve the Chinese carriers' high debt to equity ratio, which hit 78 percent by the end of 2012.
"If all goes well, the business will help lower that figure to around 70 percent by the end of 2015," Ma said.
Budget air travel is yet to gain a foothold in China.
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