ACCC OKs Virgin Acquisition of Tiger
27th Apr 2013
The planned acquisition of Tiger by Virgin Australia won't meet opposition from the country's regulatory body. This was an assurance promised by The Australian Competition and Consumer Commission (ACCC) when sought for comments about Virgin's plan to buy a controlling stake on the low-cost carrier Tiger Australia.
In October last year, Virgin Australia submitted its letter of intent to the regulatory commission to purchase more than half of the budget airline's stakes. It assured the commission that if given approval, Virgin will still allow Tiger to retain its branding strategy despite the latter holding minority stakes.
The talks on the impending acquisition of Tiger by Virgin Australia have worried the traveling public that should it happen, it will create a duopoly in the country's commercial aviation industry that would consequently result to poor service and costlier airfares.
But Virgin, prior to the approval of its acquisition of Tiger, has reiterated that it won't rebrand Tiger as its own and it will allow the low-cost airline to keep its own marketing plans with a separate management from its mother unit.
The ACCC chairman explained that the approval of the acquisition deal was necessary to allow Tiger Australia to stay in the business.
He further disclosed that the Australian subsidiary of the Singapore-based low-cost airline has never been accumulating losses since it started operations in Australia six years ago causing a drag on the Tiger group.
Now that the purchase has been finalized, Virgin Australia is now ready to take the battle with Qantas into high gear for dominance in the Australian skies. The latest acquisition will now enable Virgin to take on Qantas' Jetstar. Early this year, it successfully acquired the regional airline, Skywest, which it has pitted against QantasLink.