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Virgin to offer no guarantees on Tiger

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SYDNEY, Feb 26 AAP

February 26 2013, 4:20PM

Virgin Australia chief executive John Borghetti says there will be no guarantees given to the competition regulator to expand Tiger's fleet in a bid to get the proposed takeover deal approved.

The deal for Virgin to buy 60 per cent of the loss-making Tiger Airways Australia is currently before the Australian Competition and Consumer Commission (ACCC).

In a statement of issues released earlier in February, the ACCC said it was concerned the deal would reduce competition in the Australian domestic market.

Mr Borghetti said it was Virgin's "plan and expectation" to increase Tiger's Australian fleet from 11 currently to up to 35 aircraft by 2018, should the ACCC give the deal the green light.

However, Mr Borghetti said Virgin would not give any commitments to the ACCC to boost the Tiger fleet given the high level of uncertainty in the aviation industry.

"I don't know any responsible CEO of an airline who would ever give an undertaking on a firm commitment five years out on capacity," Mr Borghetti said during Virgin's first half results presentation on Tuesday.

"You just can't give an iron-clad guarantee on something like that because you just don't know what's around the corner."

The ACCC said another factor that could affect its final decision was the possibility Singapore-based Tiger might close down its Australian operations should the proposed deal be knocked back.

"If the ACCC were to conclude that Tiger Australia would exit the market in the absence of the proposed acquisition, this would be highly relevant to our assessment," ACCC chairman Rod Sims said on February 7.

The ACCC was expected to issue a ruling by March 14.