Vic govt supports Virgin's bid for Tiger

The Victorian government has thrown its support behind Virgin Australia's bid for a major stake in budget airline Tiger Airways, saying the deal will provide economic benefits.

Victoria's Minister for Innovation, Services and Small Business Louise Asher says Virgin's bid for a 60 per cent stake in Tiger Airways will benefit tourism and jobs in the state.

"This arrangement between Virgin Australia and the Singapore Airlines-backed Tiger Airways could see Tiger's Victorian operations grow from 11 up to 35 aircraft and we believe that offers the aviation sector in this state a great opportunity to grow," Ms Asher said in a statement on Friday.

She said the deal would increase capacity from Melbourne to Tiger Airways' Asian hub ports and key tourism and trade markets in China and southeast Asia.

The state government had written to Australian Competition and Consumer Commission (ACCC) expressing support for the partnership, Ms Asher said.

The deal is subject to approval from the ACCC and the Foreign Investment Review Board.

ACCC chairman Rod Sims has previously said the watchdog's preliminary view on the deal was that it might raise competition concerns in the market for Australian domestic air travel.

Virgin surprised the market in October when it announced a $98 million bid for Skywest and a 60 per cent buy-up of Tiger Airways.

The ACCC has already approved the Skywest bid and expects to announce its final decision on the Tiger deal on March 14.

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