Qantas Airways Ltd expects to get approval to start a budget carrier out of Hong Kong by the end of the year as Australia's biggest airline seeks to tap travel demand in China with its low-fare unit Jetstar.

Jetstar Hong Kong, set up in partnership with China Eastern Airlines Corp, will focus on flying to secondary Chinese cities, Qantas CEO Alan Joyce said at the Boao Forum in Hainan, southern China, on Sunday.

The airline will have about 18 aircraft, he said.

The first Hong Kong-based budget airline will help Qantas challenge Cathay Pacific Airways Ltd for passengers in the financial hub as Joyce tries to turn around unprofitable international operations.