Virgin, Tiger merger up in air
Competition head Rod Sims has indicated he remains in two minds about approving what he described as a "very complex" deal by Virgin Australia to wrest control of Tiger Australia.
Mr Sims, the chairman of the Australian Competition and Consumer Commission, said the deal stood in stark contrast to Qantas and Jetstar's request to work more closely with joint-venture airlines in Asia, to which the regulator gave a final clearance on Tuesday.
"[The Virgin deal] is a very complex matter, whereas Jetstar started out complex and got simple," he said.
On the eve of an expected green light for the Qantas-Emirates alliance, the competition regulator has allowed Qantas and its budget offshoot to co-ordinate with Jetstar's joint venture operations in Singapore, Vietnam, Japan and Hong Kong on passenger and cargo services for the next five years.
The regulator said the better co-ordination of services meant "little, if any, detriment" because the airlines faced stiff competition from other carriers on the mostly intra-Asian routes they flew.
With Qantas about to step up its focus on Asia, the regulatory clearance will allow it to better co-ordinate flights with connecting services in Asia by Jetstar affiliates.
Qantas' alliance with Emirates focuses mainly on Europe via Dubai in the Middle East.
The expected final clearance on Wednesday for the Qantas-Emirates alliance, due to begin on Sunday, leaves Virgin's bid for a controlling stake in Tiger as the last big aviation deal still before the commission.
Mr Sims expected the watchdog's decision on the Virgin deal to take a month because of the need for it to assess crucial information from Australia's second-largest airline.
The regulator had been due to hand down a decision on March 14 but postponed it after requesting more details from Virgin.
Mr Sims declined to respond to Virgin chief executive John Borghetti's recent threat to walk away from the deal if the regulator forced it to commit to increasing Tiger's fleet.
Mr Borghetti said Tiger's fleet could triple to 35 planes within five years, but insisted he could not promise to live up to such growth because of the volatile nature of the industry.
"It is up to John Borghetti to put views that they want to put," Mr Sims said. While the deal would help Tiger compete with Jetstar, Mr Sims remained concerned it would leave Australia dominated by two airline groups in Virgin-Tiger and Qantas-Jetstar.