MELBOURNE--Australia's antitrust regulator won't block Virgin
Australia Holdings Ltd.'s (VAH.AU) 35 million Australian dollars
(US$36 million) acquisition of a 60% stake in low-cost carrier
Tiger Airways Australia, a move that will allow it to go
head-to-head against rival Qantas Airways Ltd.'s (QAN.AU) no-frills
Jetstar unit.
In deciding not to oppose the deal, the Australian Competition
and Consumer Commission, or ACCC, said that without a takeover
Tiger--which hasn't made an operating profit in six years operating
in the country--was "highly unlikely" to remain in the local
market.
"The ACCC would always prefer to see a greater number of
independent airlines competing in the domestic market," it said in
a statement Tuesday. "However, our investigations showed that Tiger
Australia had been unable to establish itself as a viable
competitor despite substantial investment and numerous changes of
management and strategy over the years."
Virgin Australia is the second-largest domestic airline operator
in Australia, behind Qantas. It counts among its largest
shareholders entrepreneur Richard Branson's Virgin Group, Air New
Zealand Ltd. (AIR.NZ) and Singapore Airlines Ltd. (C6L.SG).
Singapore Airlines has an almost 33% stake in Tiger Airways
Holdings Ltd. (J7X.SG), which will retain a 40% stake in Tiger
Airways Australia.
Write to Robb M. Stewart at robb.stewart@wsj.com
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