ACCC grants authorisation to Qantas-Orangestar cooperation agreement
The Australian Competition and Consumer Commission has issued a determination authorising* Qantas Airways Ltd to enter into a cooperation agreement with Orangestar Investment Holdings Pte Ltd, ACCC Chairman, Mr Graeme Samuel, announced today.
Orangestar is the holding company of Jetstar Asia and Valuair.
"The cooperation agreement allows Qantas and Orangestar to coordinate their flying operations and activities, including network and scheduling decisions, sales and marketing initiatives, price and inventory decisions and the sharing of expertise.
"Following release of the ACCC's draft determination, Tiger Airways Pte Ltd**, the main opponent to the agreement, requested a conference to discuss the ACCC's position***. Tiger Airways raised concerns that the cooperation agreement between Qantas and Orangestar would eliminate actual and potential competition between the two airline groups, particularly on the Singapore-Darwin route operated by Tiger Airways.
"The ACCC has re examined the issues and remains satisfied that there are likely to be limited anti-competitive detriments arising from the cooperation agreement. In particular, the ACCC notes that there is limited overlap on current routes operated by Qantas and Orangestar and it is expected that there would not be extensive competition between the two entities in the future.
"The ACCC is satisfied that the competition concerns raised by Tiger Airways regarding the Singapore-Darwin route do not result from the cooperation agreement.
"The ACCC is satisfied that the agreement is likely to result in a net benefit to the public. The ACCC considers that the cooperation agreement will increase efficiency in the operation of the Qantas and Orangestar businesses and will allow Qantas and Orangestar to offer more cost effective, multi-destination packages to consumers.
"The ACCC also notes however the importance of Qantas ensuring that its customers are made aware of the carrier that will provide the particular service, at the time of booking".
Copies of the determination are available on the ACCC's website under Authorisations.
*Authorisation provides immunity from court action for conduct that might otherwise breach the competition provisions of the Trade Practices Act 1974. Authorisation is granted where the ACCC is satisfied that the practice delivers a net public benefit. In considering a request for authorisation the ACCC conducts a comprehensive public consultation process.
** Tiger Airways is a low cost carrier based in Singapore.
*** Following the release of a draft determination by the ACCC, the applicant for authorisation, or any interested party may request that the ACCC hold a conference. A conference provides interested parties with the opportunity to put oral submissions to the ACCC in response to a draft determination. The ACCC then reconsiders the application, taking in to account any comments made at a conference and any submissions received in response to the draft determination, prior to issuing its final determination.
