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- The Australian Competition and Consumer Commission (ACCC) opposes Qantas’ (QAN) proposed acquisition of Alliance (AQZ)
- The ACCC says following a thorough investigation, it concluded the deal would lessen competition in the supply of air transport services to resource industry customers in Western Australia and Queensland
- QAN and AQZ are key suppliers of air transport services to mining and resource companies that require fly-in fly-out (FIFO) workers in WA and QLD
- Qantas is seeking further clarity over the ACCC decision, reaffirming its stance that the acquisition would not substantially lessen competition in any market
- Shares in QAN were trading grey at $6.55 at 1:12 pm AEST, while shares in AQZ were down over 8 per cent and trading at $3.22 at the same time
The consumer watchdog has opposed Qantas’ (QAN) proposed acquisition of Alliance Aviation Services (AQZ).
The Australian Competition and Consumer Commission (ACCC) detailed that after a thorough investigation, it concluded the planned buyout would lessen competition in the supply of air transport services to resource industry customers in Western Australia and Queensland.
Qantas and Alliance are key suppliers of air transport services to mining and resource companies that require fly-in fly-out (FIFO) workers in WA and QLD.
“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,” ACCC Chair Gina Cass-Gottlieb said.
“Qantas and Alliance currently strongly compete with each other in markets where there are few effective alternatives.”
Ms Cass-Gottlieb expressed that the proposed acquisition would combine two of the largest suppliers of charter services in Western Australia and Queensland.
For that reason, the ACCC highlighted the importance of protecting such a market given the importance of FIFO workers to the economy.
It also urged that feedback received indicated Alliance was strongly valued by customers as a “vigorous and effective” competitor to Qantas.
“For many customers, Alliance is the preferred supplier due to its large fleet capacity, customer-centric approach and high-quality service offerings, including having the highest on-time-performance in the industry and demonstrated flexibility and willingness to meet customer needs,” Ms Cass-Gottlieb said.
While many Australians may not have heard of Alliance, the ACCC said it was one of the nation’s “most significant airlines”.
“Combining such an important player with Australia’s largest airline, Qantas would be likely to substantially lessen competition and is something we oppose,” Ms Cass-Gottlieb said.
The ACCC flagged concerns over Qantas’ proposed acquisition of Alliance back in August last year.
Qantas seeks greater clarity
After the ACCC announcement on Thursday, Qantas released a statement seeking greater clarity over its decision.
Qantas reaffirmed its position that the acquisition would not substantially lessen competition in any market.
The giant said the acquisition of Alliance would allow it to better service the resources sector.
Additionally, the nation’s largest airline provider confirmed it had requested a meeting with the ACCC to go over the decision.
Qantas expressed that since its announcement to fully acquire Alliance in May 2022, fellow competitor Rex acquired charter operator National Jet Express from Cobham Aviation, and Virgin Australia was cleared in its plans to expand its own resources flying.
The Flying Kangaroo first announced its long-term intention of acquiring full ownership of Alliance when it bought just under 20 per cent of the charter operator in February 2019.
Shares in QAN were trading grey at $6.55 at 1:12 pm AEST, while shares in AQZ were down over 8 per cent and trading at $3.22 at the same time.
