The Australian Competition and Consumer Commission has issued a draft decision which proposes to grant authorisation to Qantas Airways Limited and Jetstar Airways Pty Ltd for coordination involving four Asian based Jetstar branded joint ventures: Jetstar Asia, Jetstar Pacific, Jetstar Japan and Jetstar Hong Kong.
The proposed authorisation facilitates the Jetstar joint ventures coordinating with each other on passenger and cargo services, predominately on intra-Asian routes. It also allows their airline owners to support and expand each joint venture and to relate the joint ventures to their own businesses.
"The ACCC considers that the coordination is likely to result in public benefits to consumers by increasing the likelihood of additional Jetstar flights and destinations in Asia, and providing increased online connections for consumers," ACCC chairman Rod Sims said.
“The ACCC considers that the coordination is likely to result in little, if any, detriment due to the fact that the Jetstar joint ventures are unlikely to be close competitors with each other with or without authorisation, nor are the joint ventures likely to be close competitors with their owners.
“More important, in most instances where overlap does occur, there are multiple competitors present. As a result the ACCC considers that the proposed coordination is likely to result in little, if any, detriment”.
The proposed authorisation does not extend to coordination between any of the airline owners.
The Qantas Group has established these joint ventures because the international regulatory environment makes it impossible for the Qantas Group to wholly or majority own airlines outside Australia.
The joint ventures are:
- Jetstar Asia;
- which is based in Singapore, and is a joint venture between the Qantas Group and a Singapore citizen;
- Jetstar Pacific;
- which is based in Vietnam, and is a joint venture between the Qantas Group and Vietnam Airlines;
- Jetstar Japan;
- which is a joint venture between the Qantas Group and Japan Airlines; and
- Jetstar Hong Kong;
- which is a joint venture between the Qantas Group and China Eastern Airlines.
Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.
The ACCC will now invite further submissions from the applicants and interested parties in relation to the draft determination prior to making a final decision on whether to authorise the conduct. The applicants or interested parties may also request that a conference be held to make oral submissions on the draft determination.
Further information, including the application, public submissions and ACCC decisions can be found at www.accc.gov.au/AuthorisationsRegister.
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