SYDNEY, AUSTRALIA — Qantas has agreed to acquire Brisbane-based charter operator Alliance Aviation Services Ltd fully. The acquisition will enable Australia's national carrier to serve its growing network better.

The agreement, which is subject to a vote from Alliance shareholders and competition clearance, would see Alliance become a wholly-owned part of the Qantas Group.

There is no change to Qantas' arrangements with Alliance as a result of today's announcement, given the approvals required, which would take a minimum of several months to secure.

Alliance has a fleet of 70 jet aircraft that seat up to 100 people each, making them well suited to charter operations. Between these charter services and a small number of passenger routes that overlap with large mine sites, Alliance accounts for around 2% of the total domestic market. The national carrier is Alliance's biggest single customer, with a long-term agreement. Alliance operates up to 18 newly acquired E190 jets for QantasLink. This arrangement has helped open new direct routes and increase frequency across regional Australia.

Qantas bought just under 20% of Alliance in February 2019. Under the agreement announced today, the remaining 80% would be acquired through a scheme of arrangement where Alliance shareholders receive Qantas shares worth $4.75 for each Alliance share they hold, representing a 32% premium to Alliance's volume-weighted average price for the past three months. Qantas would issue new shares valued at approximately $614 million in a transaction that is expected to be EPS accretive for Qantas shareholders before synergies.