Qantas & Orangestar Cooperation Agreement

Case Title

Qantas & Orangestar Co-operation Agreement

Notifying Date

25 April 2006

Notifying Parties

The parties to the Agreement are:

1. Qantas Airways Limited ABN 16 009 661 901 (‘Qantas’) ; and

2. Orangestar Investment Holdings Pte. Ltd. Company No 200509817H (‘Orangestar’).

Summary of the nature and objective of the agreement

Qantas is Australia’s largest domestic and international airline. Qantas is also the holding company of a number of subsidiaries including Jetstar Airways Pty Limited (‘Jetstar’). Jetstar conducts Australian domestic and international airline operations.

Orangestar is the holding company of two Singapore value based airline subsidiaries, Jetstar Asia and Valuair. Qantas owns approximately 44.5% of Orangestar. The other major shareholder in Orangestar is Temasek Holdings (Private) Limited.

Given Qantas’ substantial economic interest and material management role in Orangestar, Qantas and Orangestar (together ‘the Applicants’) have entered into a Co-Operation Agreement dated 21 April 2006 (‘Co-Operation Agreement’) in order to better co-ordinate their activities and the activities of their subsidiaries, including network and scheduling decisions, sales and marketing initiatives and pricing and inventory decisions.

The Applicants and their subsidiaries are part of a Single Economic Entity and the Co-Operation Agreement results in significant Net Economic Benefit to Singapore. As such, the Applicants have applied for a Decision from the CCS that the Co-Operation Agreement does not infringe the section 34 prohibition.

There are no goods involved. The services involve passenger air services, which are the principal focus of the Application. The Agreement also relates to air freight services and sale of air travel services, but there are no appreciable effects in those markets.

Decision

The Commission is of the view that the Applicants do not form a single economic entity. Although the Agreement between the Applicants falls within the ambit of the section 34 prohibition of the Act, the Commission is of the view that the Agreement brings about net economic benefit to Singapore. The Agreement is therefore excluded from the Act.

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