VIRGIN Australia has expressed concern at Jetstar’s proposed integrated Pan-Asian Strategy, telling the Australian Competition
Consumer Commission the scope of the authorisation is “unclear.”
In a new submission to the ACCC regarding the Joint Venture Coordination Agreement sought by Qantas and current (& future) Jetstar operations (TD 09 Jul), Virgin argues the extent of the authorisation is “unnecessarily broad and potentially uncertain.”
General Counsel Adam Thatcher said the conduct of an “open ended” JVCA is described in only general terms, doesn’t provide detail on how it will be adopted, & goes beyond what is necessary to achieve the commercial case as argued, Thatcher said.
He told the competition regulator it was unclear why the integration of local partner Full Service Airlines (JAL, Vietnam Airlines &
China Eastern) was necessary to achieve the objectives of the proposal, or what benefit this would provide customers.
“Qantas/Jetstar is effectively seeking authorisation to fully cooperate (including by jointly making decisions in respect of scheduling, pricing & marketing) with its FSA competitors on unspecified actual or potentially overlapping services.
“This appears to go beyond the stated commercial rationale of the Jetstar Pan-Asia Strategy,” he said, arguing such a level of coordination between rivals on routes would likely result in an adverse effect on competition.
He added the proposed conduct “has the potential to operate in an ambiguous and uncontrolled manner,” and if approved, called
for a less than 10-yr authorisation.
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