VIRGIN BLUE LODGES FORMAL COMPLAINT TO ACCC

QANTAS/IMPULSE TAKE-OVER TO BE LEGALLY CHALLENGED


Virgin Blue commenced proceedings in the Federal Court, Sydney, today against the Australian Competition and Consumer Commission.

The action follows the decision by the ACCC to accept undertakings from Qantas, which Virgin Blue believes, do not adequately address the anti-competitive effects of the Qantas/Impulse merger.

In summary, Virgin Blue’s formal complaint claims that:

- Virgin Blue was entitled to receive reasons for the ACCC’s decision, which the ACCC has refused to provide;

- The ACCC did not afford natural justice to Virgin Blue when it failed, contrary to its own guidelines, to consult with Virgin Blue in relation to Qantas’ proposed undertakings;

- The ACCC did not exercise its power to accept Qantas’ undertakings in accordance with law. It took into account irrelevant considerations, such as when it incorrectly claimed that the undertakings would assist competitors, including Virgin Blue, to gain access to scarce take-off and landing slots at Sydney Airport. It also failed to take into account relevant considerations, such as the fact that the undertakings would increase Qantas’ market power and its ability to damage smaller competitors, such as Virgin Blue.

Chief Executive, Brett Godfrey, today reaffirmed the airline’s long held view that the Qantas/Impulse takeover was anti-competitive and he vowed to continue lobbying the ACCC to protect the interests of the Australian travelling public by providing a fair and equitable competitive aviation environment.

“The ACCC is supposed to be the consumers’ champion, we hope to see the ACCC meet that challenge”, said Brett Godfrey.

The matter will now be heard by the Federal Court, which will decide if the ACCC failed to fulfill its duty.