Qantas, China Eastern to start Hong Kong budget airline

Qantas of Australia and China Eastern Airlines are to launch Hong Kong's first budget airline in a landmark deal for foreign participation in the Chinese aviation industry, CNN reported, citing the Financial Times.

Jetstar Hong Kong will be a $198m joint venture in which Qantas and China Eastern hold equal stakes. It plans to start flying next year.

It will be the first time that major Chinese and foreign airlines have together established a passenger airline, with previous partnerships limited to cargo joint ventures or codeshare agreements.