The ACCC believes that such an acquisition would negatively impact competition within the air services market, particularly in supporting the resources sector in Queensland and Western Australia.
According to ACCC chair Gina Cass-Gottlieb, Alliance is a significant competitor to Qantas, and its removal may lead to higher prices and lower service quality for customers.
Both Qantas and Alliance presently engage in strong competition in markets with few other viable alternatives. The suggested acquisition would merge two of the largest charter service providers in Western Australia and Queensland. The ACCC's decision is informed by feedback indicating that Alliance is a notably effective and energetic competitor. It also considers the competitive landscape, including Virgin Australia, National Jet Express (recently acquired by Regional Express, or Rex), and other carriers.
Cass-Gottlieb explains that if Qantas were to acquire Alliance, competition would be limited since most other airlines lack the necessary aircraft, fleet size, or capabilities to effectively compete. She also highlights challenges faced by new or expanding airlines, such as access to training, air crew, engineers, aircraft, and infrastructure.
Qantas and Alliance both expressed disappointment and questioned the ACCC's decision, maintaining that the proposed deal would not harm competition in the market. Qantas has requested a meeting to better understand the decision. Alliance managing director Scott McMillan argues that there is strong industrial logic for Alliance to join the Qantas Group and that the acquisition would not substantially reduce competition.
In May 2022, Qantas announced its intention to acquire the remaining 80% of Alliance Aviation for A$614 million ($412 million). Alliance's fleet currently consists of 67 aircraft, including 23 Fokker 100s and 14 Fokker 70s used to support clients in the resources sector, as well as 18 Embraer E190s wet leased to Qantas. In February, Qantas exercised options to wet lease 12 additional E190s from Alliance.
Both Qantas and Alliance presently engage in strong competition in markets with few other viable alternatives. The suggested acquisition would merge two of the largest charter service providers in Western Australia and Queensland. The ACCC's decision is informed by feedback indicating that Alliance is a notably effective and energetic competitor. It also considers the competitive landscape, including Virgin Australia, National Jet Express (recently acquired by Regional Express, or Rex), and other carriers.
Cass-Gottlieb explains that if Qantas were to acquire Alliance, competition would be limited since most other airlines lack the necessary aircraft, fleet size, or capabilities to effectively compete. She also highlights challenges faced by new or expanding airlines, such as access to training, air crew, engineers, aircraft, and infrastructure.
Qantas and Alliance both expressed disappointment and questioned the ACCC's decision, maintaining that the proposed deal would not harm competition in the market. Qantas has requested a meeting to better understand the decision. Alliance managing director Scott McMillan argues that there is strong industrial logic for Alliance to join the Qantas Group and that the acquisition would not substantially reduce competition.
In May 2022, Qantas announced its intention to acquire the remaining 80% of Alliance Aviation for A$614 million ($412 million). Alliance's fleet currently consists of 67 aircraft, including 23 Fokker 100s and 14 Fokker 70s used to support clients in the resources sector, as well as 18 Embraer E190s wet leased to Qantas. In February, Qantas exercised options to wet lease 12 additional E190s from Alliance.
