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CCS issues clearance decision on Qantas-Jetstar pan-Asian strategy

23-Sep-2013 6:52 PM

Competition Commission of Singapore (CCS) cleared (23-Sep-2013) the notification for decision received from Qantas Airways Limited and Jetstar Airways Pty Limited. The notification was regarding the application of section 34 of the Competition Act to their proposed conduct under the Jetstar Pan-Asia Strategy. The Jetstar Pan-Asia Strategy pursued by Qantas Airways will enable the establishment of Jetstar JVs in a number of Asian jurisdictions, by Qantas Airways/Jetstar Airways together with local airline partners, to operate LCCs under the Jetstar brand and business model. Under the strategy, the parties to the Proposed Conduct would coordinate on network, scheduling, pricing, marketing, purchasing, customer service and resourcing decisions. After reviewing the submissions provided by the parties and various stakeholders, CCS found that "some parts of the Proposed Conduct would raise competition concerns but these would be offset by net economic benefits ("NEBs") to Singapore passengers and therefore the Proposed Conduct is excluded from the Section 34 Prohibition of the Competition Act". In arriving at this conclusion, CCS noted 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". CCS CEO Yena Lim said, "More airlines are turning to strategic alliances in response to changes in the global economy. When reviewing such applications, CCS considers whether the proposed conduct would result in better connectivity, lower fares or increased capacity to benefit Singapore passengers. This is necessary to address any competition concerns that may arise in such cooperation agreements." [more - original PR]