The Australian Competition and Consumer Commission will not intervene in the proposed acquisition of Qantas Airways Ltd by the consortium represented by Airline Partners Australia Ltd, ACCC Chairman, Mr Graeme Samuel, said today.
"The proposed acquisition is unlikely to substantially lessen competition under section 50 of the Trade Practices Act 1974.
"The ACCC conducted a comprehensive review of the proposed acquisition including extensive market inquiries with interested parties.
"The market inquiries revealed a range of potential competition issues arising from the interests of APA consortium members, including in relation to aeronautical services, domestic and international air passenger services, aircraft leasing services, airline catering, the manufacture and supply of aircraft parts, and ticket reservation and booking distribution services. The ACCC found there was no likely substantial lessening of competition in each of these cases, having regard to the restrictions on related party transactions under the APA consortium and the level of competition in the relevant markets.
"The ACCC also closely reviewed whether Macquarie Bank's partial direct and indirect interests in Qantas and Sydney Airport could lead to discrimination in favour of Qantas by Sydney Airport management, giving rise to a lessening of competition in downstream aviation markets.
"Our assessment indicated that there is a level of influence by Macquarie Bank over Sydney Airport, but that this influence is somewhat mitigated by a series of regulatory and corporate constraints.
"On the basis that Macquarie Bank may have some ability to influence Sydney Airport, the ACCC explored a variety of potential discrimination scenarios in depth with market participants," Mr Samuel said. "We recognised that Sydney Airport can already exercise a level of market power, and can discriminate between airlines for its own commercial reasons. The key question for us was whether the acquisition by Macquarie Bank of a minority shareholding in Qantas would increase its ability and incentive to seek to facilitate discrimination in favour of Qantas, to the extent that it could be a substantial lessening of competition.
"Ultimately, it appeared from the ACCC's extensive market inquiries that there were not clear incentives for Macquarie Bank to seek to facilitate increased discrimination in favour of Qantas. The ACCC therefore considers that APA's proposed acquisition is unlikely to give rise to a substantial lessening of competition."
The basis upon which the ACCC has reached its decision is set out in the Public Competition Assessment issued today, which is available on the ACCC website.