Qantas has reached an agreement with Shanghai-based airline China Eastern, to start up a new Jetstar franchise operating out of Hong Kong.

Jetstar Chief Executive Bruce Buchanen said the airline aims to capitalise on the potential of the Chinese market, in which there is only one other budget carrier.

Jetstar Hong Kong will launch in 2013 with a fleet of three Airbus 320s, growing to 18 A320’s by 2015.

The airline will service short-haul routes in Asia including Japan, South Korea, Greater China and South-East Asia.

Jetstar have promised that fares will be 50% less than full service carriers, enabling people to travel more frequently.

For more information please visit the Jetstar website.