“Better deal for passengers,” are promised as Virgin Australia take over Tiger Airways. Despite being domestic competitors, Virgin Australia is set to take over Tiger Airways with a $35million rescue package.
The Australian Competition and Consumer Commission gave the green light for the 60% take over, after fears Tiger Airways would leave Australia if the deal wasn’t granted. The ACCC also said that Tiger Airways would go under, if the deal didn’t go ahead.
“The ACCC’s view is that this acquistion, is unlikely to lead to a substantial lessening of competition in the Australian market for domestic air passenger transport services,” ACCC Chairman Rod Sims said.
Virgin Australia, Chief Executive Officer, John Borghetti said he was pleased by the ACCC clearance.
“There is a real opportunity to provide strong competition in the budget travel segment and bring further benefits to consumers.By partnering with Tiger Airways, we can use our local expertise to build a sustainable budget carrier, which will offer great value airfares and benefit jobs and tourism in Australia.”
Tiger Airways are also happy with the rescue package, according to CEO, Koay Peng Yen the deal will only lead to a stronger Tiger Australia.
“With this approval in place, we can now look forward to commencing discussions with Virgin on our plans to grow Tiger Australia, and enable it to compete more effectively in the Australia’s budget carrier space.”
This will also help boost the tourism industry, according to Tourism and Transport Forum Acting, Chief Executive, Trent Zimmerman.
“This is a sensible outcome. Maintaining a second low-cost carrier will ensure healthy competition at the price sensitive end of the market. It will ensure the travelling public will have more choice and will help keep fares down.”
The deal is expected to be completed by the October 30th, pending on conditions and regulation approvals.