Competition watchdog rejects Qantas’ acquisition of Alliance

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Qantas Airways will be barred from acquiring private charter flight provider Alliance Aviation after the ACCC said the transaction would likely reduce service quality for FIFO workers.

Qantas Airways will be barred from acquiring private charter flight provider Alliance Aviation after the Australian Competition and Consumer Commission said the transaction would likely lessen competition and lead to increased flight prices and reduced service quality for fly-in-fly-out workers.proposed acquisition

“The proposed acquisition would combine two of the largest suppliers of charter services in Western Australia and Queensland. We consider Alliance to be an important competitor to Qantas, and the removal of Alliance is likely to substantially lessen competition, threatening increased prices and reduced service quality for customers.

While the ACCC considered the level of competition provided by other players, Cass-Gottlieb said that neither existing airlines, such as Virgin Australia and National Jet Express, nor a new entrant, would likely have the capacity to expand quickly enough to a scale that would make up for the loss of competition resulting from the proposed acquisition.

In 2019, Qantas announced it had acquired a 19.9 per cent holding in Alliance Aviation – a move the ACCC decided not to take enforcement action against. On May 5, 2022, Qantas announced that it had reached an agreement to acquire the remaining shares in Alliance that it does not already own. In an announcement to the ASX, Qantas said it would seek more information from the ACCC about its decision and maintained the transaction would not substantially lessen competition.

 

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