Tiger deal on hold due to demand
THE competition regulator has delayed making a decision on Virgin Australia's bid to wrest control of Tiger Australia after requesting more details about the deal.
Virgin notified investors on Friday that it had received a request from the Australian Competition and Consumer Commission for further information.
The airline would not reveal what information it had been asked to provide.
The regulator had earmarked next Thursday as the date for when it would make its decision on the deal which, if approved, would return Australia's aviation industry to an effective duopoly.
The commission said it had delayed the decision to allow time for Virgin to provide the extra information, and that it would announce a new date in "due course".
However, the call for more details from Virgin means a decision is unlikely to be made until next month at the earliest.
Virgin chief executive John Borghetti has threatened to walk away from the proposed deal if the regulator forces it to commit to growing Tiger's fleet.
He has said Tiger's fleet could be tripled to 35 planes within five years but insists that he cannot promise to live up to such growth because of the volatile nature of the industry.
Virgin and Tiger's Singaporean parent have been relying on the "failing firm" argument to win approval from the regulator.
Analysts have expected the deal to gain approval from the Australian regulator.
CBA Equities analyst Matt Crowe has said Mr Borghetti's recent comments made the Tiger deal "less likely" but he also pointed out that the commission's view on whether the budget airline would be able to survive on its own in a competitive market will be a key factor in the regulator's final decision.
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