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Competition commission Down Under raises concerns over Virgin-Tiger deal

Published on Feb 7, 2013 10:44 AM
 
(Top) A Boeing 737 passenger jet bearing the new livery of Virgin Australia Airlines Pty Ltd. touches down for its unveiling as the new face of the Virgin Blue Group of airlines, in Sydney, Australia, on May 4, 2011. A Tiger Airways Airbus A319 aircraft taxis on a runway at Changi Airport in Singapore in this May 13, 2009, file photograph. The Australian competition watchdog has raised concerns over a proposed plan by Virgin Australia to take control of Tiger Airways.  -- PHOTOS: BLOOMBERG/REUTERS

The Australian competition watchdog has raised concerns over a proposed plan by Virgin Australia to take control of Tiger Airways.

The deal could reduce competition by eliminating a major and independent player in Australia's domestic air travel market, said the regulator on Thursday. Tiger Airways Australia - an arm of Singapore's Tiger Airways Holdings - is the third biggest carrier Down under, after Qantas and Virgin.

Even as it flags its concerns, the Australian Competition and Consumer Commission said in a statement that it is also mindful that if the deal is blocked, Tiger could exit the market altogether.

Tiger's shareholders have said yes to the tie-up which will see Virgin forking out A$35 million ($44.7 million) for a 60 per cent stake in the budget carrier. The regulator has called for further submissions and will issue a final ruling on March 14, it said.