Virgin-Tiger deal 'a plus for 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.
Frequently Asked Questions about this Article…
Virgin Australia has proposed taking a 60% stake in Tiger Australia — a bid its boss John Borghetti says would put Virgin in control of the budget carrier and let it compete more strongly at the leisure end of the market.
John Borghetti says the deal would prevent Jetstar from creating a monopoly at the leisure end of Australia's air travel market, allow Virgin to return to competing at the budget end, and be "good for the market" by stopping one carrier dominating that segment.
The competition regulator has delayed its decision because it wanted more information and has reservations about the deal — in particular that it would effectively return Australia to an airline duopoly, which raises competition concerns.
Regulators are concerned the transaction would effectively return the country to an airline duopoly. That is a central reason the competition regulator is scrutinising the deal and seeking more information.
Yes — Mr Borghetti has indicated Tiger's Singapore parent was serious about its threat to pull Tiger out of Australia if Virgin was prevented from taking a 60% stake.
Virgin has argued the deal would check Jetstar's "enormous expansion" in the domestic market and stop the budget segment from becoming a monopoly, positioning Virgin to compete more directly with Jetstar at the leisure end.
Virgin's $100 million bid for West Australian regional airline Skywest cleared a further hurdle when Skywest shareholders voted overwhelmingly in favour of the deal, signalling continued expansion activity by Virgin that investors may view as part of its broader strategy.
Investors should watch the competition regulator's review and any additional information requests, statements from Tiger's Singapore parent about a potential pull-out, and related corporate moves like the Skywest shareholder vote — all of which could affect market structure and airline competition in Australia.
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