Australia's competition regulatory body yesterday gave the green light for the merger between Jetset Travelworld (JTG) and Stella to go ahead.

“We’re very pleased with the ACCC’s decision,” current Stella chief executive, and soon-to-be head of the merged entity, Peter Lacaze told e-travel-Blackboard.

“The ACCC went through a lengthy and extensive inquiry into every single part of the merger and we worked with them closely so they were properly informed to make a decision,” Mr Lacaze said of the news which had come a day earlier than expected.

The ACCC initially posted concerns of the proposed acquisition in a statement released on 21 July, claiming the merged entity might reduce competition in the market, however the competition regulator gave its implicit approval after “extensive further inquiries”.

"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,” ACCC chairman Graeme Samuel said.

"[N]ot 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."

In agreement, Mr Lacaze said that traditional travel agents were “caught in a competitive vice with Flight Centre on the one side and online travel agents (OTAs) on the other”.

And that, according to Mr Lacaze is the rationale behind the JTG/Stella merger.

“Unless new models come into play, it is very difficult for the traditional travel agent.

“OTAs, direct suppliers and Flight Centre all have cost advantages [over them] and cost synergies from this merger will significantly reduce our franchisees’ and members’ costs.”

JTG are set to hold their General Meeting on 6 September 2010 where shareholders will vote on ten resolutions.

“When all that is done, the merger will be completed on 30 September 2010.”