CCS issues clearance decision on Qnatas-Jetstar pan-Asian strategyN-ASIA ST

23-Sep-2013 1. The Competition Commission of Singapore ("CCS") has cleared the notification for decision received from Qantas Airways Limited ("Qantas Airways") and Jetstar Air- ways Pty Limited ("Jetstar Airways"). The notification was regarding the application of section 34 of the Competition Act to their proposed conduct under the Jetstar Pan- Asia Strategy ("Proposed Conduct"). 2. The Jetstar Pan-Asia Strategy pursued by Qantas Airways will enable the establish- ment of Jetstar joint ventures ("Jetstar JVs") in a number of Asian jurisdictions, by Qantas Airways/Jetstar Airways together with local airline partners, to operate low- cost carriers ("LCCs") under the Jetstar brand and business model. Under the strat- egy, the parties to the Proposed Conduct would coordinate on network, scheduling, pricing, marketing, purchasing, customer service and resourcing decisions. 3. After reviewing the submissions provided by the parties and various stakeholders, CCS finds that some parts of the Proposed Conduct would raise competition con- cerns but these would be offset by net economic benefits ("NEBs")1 to Singapore passengers and therefore the Proposed Conduct is excluded from the Section 34 Prohibition of the Competition Act.2 In arriving at this conclusion, CCS notes that the presence of LCCs on routes can generally increase the level of competitiveness through increased capacity and reduced prices from existing airlines on these routes. 4. CCS Chief Executive, Ms. Yena Lim said, "More airlines are turning to strategic alli- ances in response to changes in the global economy. When reviewing such applica- tions, CCS considers whether the proposed conduct would result in better connec- tivity, lower fares or increased capacity to benefit Singapore passengers. This is necessary to address any competition concerns that may arise in such cooperation agreements."