Australian regulators won't stop Virgin/Tiger deal

 The Australian Competition and Consumer Commission (ACCC) says it will not block Virgin Australia from purchasing up to 60 percent in Tiger Airways, claiming the the acquisition is unlikely to lessen competition in the Australian market.

Virgin Australia applied for regulatory approval to purchase more than half the low-cost carrier in October last year, with the assurance the airline would maintain its Tiger branding.

Although initially claiming the deal would reduce the number of domestic airline groups in Australia from three to two and risk creating “muted competition”, ACCC chairman Rod Sims today said after thorough testing, the group found Tiger would be unable to remain in the local market if the proposed deal did not proceed.

According to the regulatory boss, Tiger Australia had failed to make a profit during its six years in Australia, and the losses were causing a “big drag” on the Tiger Group.

"Virgin Australia now has the opportunity to pursue its stated objective of transforming Tiger Australia into an effective competitor to Jetstar for price sensitive travellers," Mr Sims explained.

In other Virgin Australia news, the carrier has announced along with its alliance partner Air New Zealand that it will add more than 30,000 extra seats between Queenstown and Australia over the peak winter period of July to September this year.

The airlines will operate five additional return A320 services per week from Brisbane, Melbourne and Sydney to Queenstown.

Sourced: etravelblackboardasia