Virgin plans to take control of Tiger's Australian business, buying a 60 per cent stake for $35 million. Mr Crowe says the ACCC's decision to approve the Qantas-Emirates alliance shows capacity is a key consideration for the watchdog. In that deal, approved last week, the watchdog's only major condition centred on maintaining capacity for certain routes. "It appears the ACCC wants more than public comments about growth intentions," Mr Crowe says in a note to investors. Rather, a binding capacity undertaking or a condition such as the one it has just imposed on Qantas and Emirates may be required. The watchdog has previously said Virgin's intentions to increase Tiger's fleet from 11 to 35 aircraft over the next five years would be a favourable factor as it would minimise the effects of a loss in competition. But Virgin chief John Borghetti said in February he could not give an "ironclad" guarantee the expansion would take place as proposed. ACCC chairman Rod Sims said in February the competition watchdog would take into account whether loss-making Tiger could continue operating in Australia without Virgin's investment. But Mr Crowe says the ACCC will question why, if Virgin is convinced Tiger will exit the market, the airline would pay to buy a stake rather than wait for the competitor to fail and then expand into the space. "One possible answer is to remove a competitor and prevent turning a two-player market into a three-player market," Mr Crowe says. This logic is likely to raise concerns about reduced competition.