It's the travelling public who have lost out, because the message from this decision is that Hong Kong appears closed to fresh aviation investment even when it is majority locally-owned and controlled," he said in a statement on Friday.
He added that Hong Kong was going in the opposite direction of other aviation markets in Asia that were "opening up".
"Given the importance of aviation to global commerce, shutting the door to new competition can only serve the vested interests already installed in that market."
The airline, along with its partners, said it had not yet decided on whether to appeal the decision.
The joint venture was valued at $10m Australian dollars ($7.7m; £4.9m), according to Qantas.
Shares of Qantas were down 1.4% in Sydney in reaction to the news.