China Eastern Airlines (Shanghai) and the QANTAS Group (Sydney), which owns the Jetstar Group, have entered a new strategic alliance to bring Asia’s leading low fares airline model to China with the creation of Jetstar Hong Kong.

According to both parties, “Jetstar Hong Kong will combine the partners’ local knowledge, networks and successful low cost carrier model to service short haul routes in Asia, including Greater China, Japan, South Korea and South East Asia. It will be the first low fares airline based in Hong Kong.”

Subject to regulatory approval Jetstar Hong Kong services will start in 2013 with a fleet of three Airbus A320s, growing to 18 A320s by 2015.

Jetstar Hong Kong is underpinned by a total maximum capitalization of up to $198 million. The shareholding percentage in Jetstar Hong Kong will be equally held by China Eastern Airlines and QANTAS Group, which will be equal partners in the Joint Venture. The maximum exposure for each partner is $99 million over a three year period.

In other news, Jetstar Japan will welcome Century Tokyo Leasing Corporation as its fourth shareholder in the new low fares airline venture.

The transaction was concluded when Mitsubishi Corporation transfered half of its current 33.3% voting rights stock in Jetstar Japan to Century Tokyo Leasing Corporation on March 27, 2012.

The new partnership reinforces Jetstar Japan’s financial foundation by adding an additional stockholder and creating a strategic operational tie-up ahead of the start of services on July 3, 2012. This transaction will not affect the total capital or capital reserves.

With this transaction, holding ratios in Jetstar Japan will be Jetstar Group with 33.3%, Japan Airlines Company, Ltd. with 33.3%, Mitsubishi Corporation with 16.7% and Century Tokyo Leasing Corporation with 16.7% on a voting rights basis.