Hong Kong rejects Jetstar budget airline application backed by Qantas, China Eastern

Hong Kong regulators have rejected an application for a budget airline joint venture involving Australia's Qantas and China Eastern Airlines after local carriers objected.

The Air Transport Licensing Authority said Thursday it denied Jetstar Hong Kong's application for a license because its majority foreign ownership meant its main place of business was not in Hong Kong.

The startup applied for the license in June 2013.

Qantas Airways, Shanghai-Based China Eastern and local partner Shun Tak Holdings each own a third of the $198 million venture.

The licensing authority held an inquiry earlier this year into the application after Cathay Pacific Airways, Dragonair and Hong Kong Airlines objected to the application.

Hong Kong is a self-administered region of China with its own legal and financial system.