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Tiger Airways rejects Virgin Blue – Air NZ deal to ACCC

Tiger Airways has submitted objections to Virgin Blue’s deal with Air New Zealand on trans-Tasman routes to the ACCC.

Tiger Airways
Tiger Airways current terminal at Tullamarine

Tiger Airways, which is operating on extremely thin margins is threatened by the Virgin Blue/Air New Zealand deal, fearing the efficiencies gained by the carriers due to the deal will place Tiger Airways at risk of leaving the market, thus lessening competition and increasing fares.

The Age reports that in Tiger Airways submission to the ACCC, Tiger’s new Australian boss, Crawford Rix said that both Virgin Blue and Air New Zealand needed to work separately rather than join forces to battle the new economic reality facing the airline industry.

”If allowed to combine their activities, [the airlines] have the ability to eventually reduce flights and seat numbers, reduce frequencies or services on marginal routes, and could utilise their increased combined market power to raise prices and prevent potential new entrants,” he is reported to have said.

On the back of their submission to the ACCC, Tiger Airways has announced additional routes operating out of the airline’s new base at Melbourne’s Avalon Airport.

Tiger Airways moved a number of flights from their home base at Tullamarine Airport to Avalon after striking a deal with the airports operators that significantly cuts down their operating costs so that Tiger can achieve their ‘Low Fare Revolution’ goals. Tiger Airways will now run flights from Avalon to Sydney, Rockhampton, Mackay and Alice Springs in addition to flights to the Gold Coast, Adelaide and Perth announced previously.

Tiger Airways spokesman Simon Mossman told The SMH that there were no plans to move its entire fleet away from Tullamarine.

“That’s absolutely not on the cards whatsoever. We’re merely adding capacity to Tiger’s current services,” he said.

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David Olsen

David Olsen

An undercover economist and a not so undercover geek. Politics, business and psychology nerd and anti-bandwagon jumper. Can be found on Twitter: <a href="http://www.twitter.com/DDsD">David Olsen - DDsD</a>

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