On 5 September 2013, the Competition Commission of Singapore (the “CCS”) issued a clearance decision in favour of the proposed conduct under the Jetstar Pan-Asia Strategy (the “Strategy”). Coordination on network, scheduling, pricing, marketing, purchasing, customer service and resourcing decisions (the “proposed conduct”) is required to operationalise the Strategy.
By way of background, on 6 August 2012, the CCS received a notification for decision (the “notification”) from Qantas Airways Limited and Jetstar Airways Pty Limited, on behalf of existing and future Jetstar branded low cost carriers. The parties were seeking the CCS’ decision as to whether the proposed conduct under the Strategy would infringe section 34 of the Competition Act (the “Act”). The proposed conduct is intended to deepen the Qantas Group presence in the Asia-Pacific by expanding the Jetstar network in circumstances in which the international aviation regulatory environment makes it impossible for the Qantas Group to wholly or majority own airlines outside Australia.
Section 34 of the Act prohibits agreements or concerted practices which have as their object or effect the prevention, restriction or distortion of competition within Singapore (the “section 34 prohibition”). An agreement involving, inter alia, directly or indirectly fixing prices, and/or limiting or controlling production or investment, is by its very nature, regarded as restrictive of competition to an appreciable extent. However, such an agreement may be excluded from the section 34 prohibition if it can be proven that the agreement may result in net economic benefits (“NEB”).
The CCS decided that the proposed conduct does not infringe section 34 of the Act. The decision does not cover parts of the proposed conduct which are prospective. The CCS shall take no further action unless:
- it has reasonable grounds for believing that there has been a material change of circumstance since it gave its decision; or
- it has reasonable grounds for suspecting that the information on which it based its decision was incomplete, false or misleading in a material particular.
The following materials are available from the CCS website www.ccs.gov.sg: