ACCC doubts over Virgin, Tiger deal

ACCC doubts over Virgin, Tiger deal
By admin


The competition regulator has invited further submissions on Virgin Australia's proposed acquisition of a 60% stake in Tiger, as it raised concerns the deal could mute competition in the domestic market.

The Australian Competition and Consumer Commission today released a Statement of Issues regarding the deal which sets out its preliminary views and seeks further information on the competition issues which have arisen in the course of its review to date.

"The ACCC's concerns relate to the risk of muted competition following the reduction of the number of airline groups within Australia from three to two (excluding regional airlines), and the loss of Tiger Australia as an independently owned discount competitor," ACCC chairman Rod Sims said.

"This potential reduction in competition arises as a result of the increased ability on the part of Qantas'Jetstar and Virgin Australia/Tiger Australia to coordinate their activities once Tiger Australia is no longer operating as an independently owned discount competitor."

Tiger Australia's financial position and the impact of the acquisition on the low cost carrier's size and strength could also affect the ACCC's final decision, it revealed.

"If the ACCC were to conclude that Tiger Australia would exit the market in the absence of the proposed acquiaition, this would be highly relevant to our assessment," Sims said.

In addition, plans to increase Tiger's fleet from 11 aircraft to 35 by 2018 under the terms of the proposed joint venture could also have an impact, with an increase in capacity likely to diminish "the prospect of any increase in coordinate conduct in the market", according to Sims.

As a result of the call for further submissions, the ACCC's final decision, scheduled for today, is now expected on March 14.

Virgin Australia responded to the release of the Statement of Issues, saying it is in the process of reviewing the document and preparing its response.

"Virgin Australia strongly believes the proposed acquisition will increase competition in the market to the benefit of consumers," the airline said.

Latest News

  • Conferences

Sydney confirms position as Australia’s No. 1 business events host

Sydney’s reinforced its position as the world’s preferred Australian host city, and top Australian city in the APAC region for international and local business events. Sydney secured 25th place in the worldwide ICCA city rankings and ranked 6th (ICCA) and 3rd (CVENT) in the Asia Pacific region. Tourism Australia also celebrated the ICCA 2023 rankings […]

  • Food & Beverage
  • Hotels

Luke Mangan launches Bistrot Bisou, his first Melbourne restaurant in over a decade

Melbourne-born, Sydney-based chef and restaurateur Luke Mangan will open his first Melbourne restaurant in more than a decade this winter with the launch of Bistrot Bisou, set within the art-focused, character-filled Hotel Indigo. Set on the corner of Flinders Lane and Spencer Street, the relaxed French bistro and bar will feature modern takes on classic […]

  • Luxury

COMO launches new family-sized farmhouse in the heart of Tuscany

COMO Hotels and Resorts has launched its new farmhouse apartments in the heart of Tuscany, just in time for Australians to escape our wet winter. And it’s also an ideal time for Aussies of Italian ancestry to explore their home country as 2024 has been declared the year of Roots and Heritage Tourism by the […]

  • Destinations
  • News

New Caledonia in lockdown and airport closed after violent riots rock Noumea

New Caledonia officials have announced a 6pm-6am curfew, a liquor ban and have closed the country’s main airport after overnight riots in which vehicles were torched and roads blocked in the wake of proposed constitutional reforms. Australian Government website Smartraveller has issued an alert informing visitors to exercise a high degree of caution in metropolitan […]