Virgin-Tiger deal 'a plus for market'

Virgin Australia boss John Borghetti insists his airline's bid to take control of Tiger Australia will prevent Jetstar from creating a monopoly at the leisure end of the country's air travel market.

Virgin Australia boss John Borghetti insists his airline's bid to take control of Tiger Australia will prevent Jetstar from creating a monopoly at the leisure end of the country's air travel market.

As he faces a longer wait than expected for a decision from the regulator on the deal, Mr Borghetti also made clear that Tiger's Singapore parent was serious about its threat to pull out of Australia if Virgin was prevented from taking a 60 per cent stake in the budget airline.

The competition regulator last week delayed its decision because it wanted more information.

Mr Borghetti said Jetstar had been focused on an "enormous expansion" in the domestic market, and the Tiger deal would "stop the budget market becoming a monopoly".

"It allows us to go back and compete, and do what we did so well when we were Virgin Blue at the bottom end of the market," he said. "It is good for us, it is good for the market, it stops a monopoly - that is pretty compelling."

The regulator has reservations about the deal because it will effectively return the country to an airline duopoly.

Mr Borghetti's latest comments come as Virgin's $100 million bid for West Australian regional airline Skywest cleared a further hurdle on Wednesday when its shareholders voted overwhelmingly in favour of the deal.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles