The Australian Competition and Consumer Commission has issued a draft determination proposing to authorise* Qantas Airways Ltd, to enter into a cooperation agreement with Orangestar Investment Holdings Pte Ltd, ACCC Chairman, Mr Graeme Samuel, said today.
Orangestar is the holding company of Jetstar Asia and Valuair. The cooperation agreement will allow Qantas and Orangestar to coordinate their flying operations and activities.
Qantas also applied for interim** authorisation for the arrangements, which was granted, with conditions, on 24 May 2006. The ACCC has revisited the request and has decided to grant interim authorisation to the entirety of the arrangements.
The ACCC has assessed Qantas' proposal and considers that any anti-competitive detriment that may flow from it is likely to be minimal.
In particular, the ACCC noted 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 proposed arrangements are likely to result in a net benefit to the public. In particular, the arrangements will increase efficiency in the operation of the Qantas and Orangestar businesses and will enable both airline groups to offer more cost effective, multi-destination packages to consumers.
The ACCC will now engage in a further round of public consultation before proceeding to make a final decision on the proposed agreement. Copies of the draft determination are available on the ACCC's website.