Giant new force set to rise on Australian travel scene
Australia is set to see the emergence of a major new travel entity as Jetset Travelworld Limited acquires Stella Travel Services Holdings Pty Ltd.
Australia’s consumer watchdog, the Australian Competition and Consumer Commission has opened the door to the deal, declaring that it will not oppose the proposal.
The brands of Stella Travel Services include Harvey World Travel and Travelscene American Express, and Jetset Travelworld also operates Qantas Holidays and Qantas Business Travel.
On 21 July 2010 the ACCC published a Statement of Issues outlining certain competition issues which arose during the course of the ACCC’s initial market inquiries.
The ACCC said at the time that it felt that Jetset Travelworld’s move to acquire Stella “may raise competition concerns in relation to the wholesale supply of travel packages and tours in Australia by foreclosing access to retail distribution by the merged firm’s wholesale rivals”.
The proposed acquisition might affect the supply of air ticket consolidation services in Australia “which may in turn further affect the ability of the merged firm’s rivals in the downstream retail market to compete”, the ACCC considered.
After extensive further inquiries with retail travel agents, wholesalers, content providers (such as airlines and hotels) and industry associations, however, the ACCC has now concluded that the proposed acquisition is “unlikely to result in a substantial lessening of competition in any of the relevant markets”.
“The ACCC conducted an extensive review of this transaction to ensure that it would not adversely impact Australian travellers,” ACCC chairman Graeme Samuel commented.
“After looking very closely at the issues, the ACCC found that the merged Jetset-Stella entity and its member agents are likely to face continued and increasing competition from online travel agents, direct supply by airlines and hotels, and the largest travel retailer in Australia, Flight Centre.
“The internet has dramatically affected the way competition works in the travel industry as more and more customers look online for the best deals,” Mr Samuel said.
“As a result, not only are traditional bricks and mortar agents forced to compete harder on price and service to attract customers, but airlines, hotels and tour companies also have new ways of reaching those customers. In this context, the Jetset-Stella merger is unlikely to substantially lessen competition.”
The ACCC also concluded that Qantas Airways Limited owning a lesser interest in a larger retail group, when compared to the current interest Qantas holds in Jetset, was unlikely to substantially lessen competition.
A Public Competition Assessment outlining the ACCC’s reasons for its decision will be available on the ACCC’s website, www.accc.gov.au, in due course (refer to Public Competition Assessments).
One person who professes to be unconcerned about competition arising from any merger of the travel companies in question is Travel Centre managing director Graham Turner.
In July, Turner told the Australian newspaper that the combined business was likely to be too unwieldy to be a serious threat.
“It will make herding cats look easy,” Turner said.
Written by William Sykes
you have it the wrong way around, officially its a merger…. but the reality is that Stella is taking over Jetset, not the other way around!