Air New Zealand-Ansett and Virgin Blue have angrily attacked a decision by the Australian Consumer Competition Commission (ACCC) to allow the proposed Qantas take-over of low-cost carrier Impulse Airlines' operations (Flight International, 8-14 May).

Announcing the decision on 18 May, ACCC chairman Professor Allan Fels said the likely failure of Impulse and the lack of alternative buyers had led the ACCC to weigh the impact of two possible options on longer term competitiveness among Australian domestic carriers: "These alternatives were to allow Impulse to go into receivership, or to allow Qantas to acquire the company. Given the alternatives and after extensive evaluation, the ACCC concluded that the acquisition would lessen competition. But the ACCC also said the competition concerns could be better addressed by allowing the acquisition to proceed accompanied by undertakings designed to improve the competitive position of firms currently constrained in their ability to expand, and of any potential new entrants. Under the other alternative, that is a receivership for Impulse, a less competitive outcome was likely," he said.

Conditions imposed on Qantas relate mainly to access to scarce take-off and landing slots at Sydney Airport, terminal access and undisclosed price undertakings.

Air New Zealand-Ansett Airline Group president and CEO Gary Toomey says the group will respond vigorously. "The Qantas/Impulse merger extends Qantas competitive power in the Australasian market and will affect services on both sides of the Tasman. It increases Qantas strength in the Australian domestic market and enables them to enter the New Zealand one in their own right."

Describing his airline as "disheartened and disappointed", Virgin Blue chief executive Brett Godfrey claims the conditions imposed on Qantas "will not address the key anti-competitive issues of capacity dumping and predatory pricing".

Source: Flight International