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ACCC gives Qantas draft green light in Asia
A draft determination yesterday by the Australian Competition and Consumer Commission proposes to give Qantas the green light to co-ordinate flying and other activities with Singapore based Orangestar, the holding company for Jetstar Asia and Valuair.
Qantas owns 44.5% of Orangestar and wants to link the low-cost Asian carrier with its mainline operations in Australia as well as Jetstar International services.
Singapore Airlines backed Tiger Airways opposed the move strongly, arguing that it was anti-competitive and they asked the ACCC to either reject it or impose a number of conditions.
The ACCC responded stating that said the relationship tie-up would result in a net benefit to the public, noting there was limited overlap on routes operated by Qantas and Orangestar and that it did not expect extensive future competition between the two carriers.
The draft determination said, “The ACCC is satisfied that the proposed arrangements are likely to result in a net benefit to the public.” “In particular, the arrangements will increase the efficiency in the operation of Qantas and Orangestar businesses and will enable both airline groups to offer more cost-effective, multi-destination packages to consumers.”
The ACCC is proposing to grant authorisation for five years on condition the airlines do not withdraw from overlapping routes or allocate existing capacity to those routes.
In addition, they are also not allowed to enter into any agreement that prevents either airline from entering routes to or from Australia.
This latest draft determination comes after a conditional interim authorisation in May, which allowed the airlines to begin work on some joint marketing activities such as a joint website.
The next step will be a further round of public consultation before a final decision is issued.
Report by The Mole
John Alwyn-Jones
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