Singapore regulators just paved the way for a stronger Jetstar. The budget airline has received approval to coordinate its services with Qantas (ASX: QAN), allowing both airlines increased access to Australasian air.
The new thumbs up will allow the two companies to better align flights to and from Australia and Asia, connecting flights that would’ve previously been disconnected. In the Competition Commission of Singapore’s report, the regulatory body found that although “some parts” of the alliance could create a questionable lack of competition, any worries were outweighed by overall benefits to customers.
The Commission emphasized that, in general, budget airlines can cut prices by expanding capacity, an ultimate plus for the consumer. Australian regulators had already approved the arrangement in March, so this latest decree sets both companies free to coordinate.
While the move is obviously a win for both companies, Quantas especially could benefit as Jetstar continues to expand its Asia footprint. The airline is currently waiting on local approval for Hong Kong operations, and has already received Australian approval for five years of coordination in Hong Kong, as well as in Vietnam and Japan.
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Motley Fool contributor Justin Loiseau has no position in any stocks mentioned in this article. You can follow him on Twitter @TMFJLo.