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Jetstar gets nod for increased coordination; Virgin-Tiger in doubt

written by australianaviation.com.au | March 27, 2013

The ACCC has approved a plan to increase coordination between the various Jetstar brands.

Qantas’ plans to increase coordination between its growing stable of Jetstar joint ventures across Asia has received regulatory approval even as Virgin Australia’s bid to take over Tiger Airways appears in question.

In Tuesday’s ruling, the Australian Competition and Consumer Commission said it would allow Jetstar and its offshoots in Sinapore, Vietnam, Japan and Hong Kong to coordinate passenger and cargo services. The competition watchdog said the coordination would benefit consumers by increasing the likelihood of additional Jetstar flights and destinations in Asia.

“The ACCC considers that the coordination is likely to result in little, if any, detriment due to the fact that the Jetstar joint ventures are unlikely to be close competitors with each other with or without authorisation, nor are the joint ventures likely to be close competitors with their owners,” ACCC chairman Rod Sims said.

“More important, in most instances where overlap does occur, there are multiple competitors present. As a result the ACCC considers that the coordination is likely to result in little, if any, detriment,” Sims said.

But in an interview with Fairfax Media, Sims sounded a far more cautious note on Virgin’s proposal to take over Tiger, calling it “a very complex matter.” The ACCC had been due to release a decision on March 14 but instead asked for more information from Virgin. Sims said a decision isn’t likely for at least another month.

The proposed deal seen as a move to counter the Qantas-Jetstar relationship by giving Virgin its own budget subsidiary, but Sims is reportedly concerned about opening the way for what would amount to a duopoly.



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