Virgin urges caution over QF plan
Virgin Australia has followed Cathay Pacific in questioning how the public will benefit from a proposed Pan Asia tie-up between Qantas and Jetstar.
The carrier told the Australian Competition and Consumer Commission (ACCC) that more information is needed before the application can be properly analysed.
In a submission to the ACCC, Virgin Australia described the scope of the application as “very broad” that appears to “go beyond what is necessary to achieve the commercial case as argued”.
Qantas and Jetstar are looking to establish a fully integrated organisation as part of Jetstar’s Pan Asia strategy. It includes joint network and scheduling, sales and marketing, pricing and inventory, distribution and frequent flyer schemes.
The application is also seeking to cover all future Jetstar joint ventures.
Virgin said the application contained no evidence to show it would result in “claimed” public benefits.
“For example, it is unclear how the proposed conduct will increase tourism and employment in Australia,” Virgin Australia’s company secretary Adam Thatcher said in the submission. “Virgin Australia considers that further evidence is required in order to properly assess the claimed public benefits.”
The airline also rejected the inclusion in the agreement of future Jetstar JVs. Approval of such a request would risk the tie-up operarting in “an uncontrolled and ambiguous manner”.
It would be impossible for the ACCC to examine competition issues “where the identity of the parties and the potential competitive overlap cannot be identified at the time of the application”.
Virgin Australia also argued against the 10-year time frame being sought by Qantas. Competitive effects and public benefits of the alliance need to be tested after a shorter period of time, it said.
Email the Travel Weekly team at traveldesk@travelweekly.com.au
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