Competition regulators gave preliminary clearance to Qantas to establish an interlinked low-cost airline network in Asia through its Jetstar brand despite opposition from rival LCC Tiger Airways.The Australian Competition and Consumer Commission provided interim authorization for Qantas and its wholly owned Jetstar subsidiary to cooperate with its 44.5% Singapore venture Orangestar Holdings--the holding company for the combined Jetstar Asia and Valuair--on fares, schedules and routings. This means the group can offer a consistent product and link up services operating into, out of and within Asia.

ACCC said its initial determination was made on condition that the agreement between Qantas and Orangestar does not extend to allocation of existing capacity, withdrawal of services on overlapping routes or entry onto routes to/from Australia. The authority has not made a final decision.

Qantas proposes to bring together the operations of Jetstar and Orangestar in an attempt to reduce overheads further and enhance competitiveness. While Jetstar has proved a success story on domestic and transtasman routes, Jetstar Asia has been struggling, with losses of A$27.4 million in the December half-year.

The tie-up between the carriers will increase passenger feed and strengthen the position of the Jetstar brand in the Asian market as it begins flights between Australia and Thailand, Vietnam, Bali, Japan and Hawaii in November in the initial phase of its international expansion (ATWOnline, April 12).

Separately, Jetstar will increase its Adelaide-Darwin service to five-times-weekly from twice-weekly on July 1. Six-times-weekly Melbourne-Darwin service will become daily the same day. It also renewed its outsourcing agreement for Navitaire's reservations and revenue management systems. The deal includes new codeshare booking and passenger processing capabilities.