The Australian Competition and Consumer Commission (ACCC) will oppose the proposed takeover of Alliance airline by Qantas. This was announced today by the government body in charge of, among other things, preventing unlawful anti-competitive behaviour.
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The regulator says Qantas will face limited competition if it acquires Alliance
In a statement, the ACCC said that «after a thorough investigation of the proposed acquisition» it concluded that «the transaction is likely to substantially lessen competition in markets for the supply of air transport services to resource industry customers in Western Australia and Queensland».
The two airlines are the largest providers of services to mining and resources companies in those states, where they compete with each other. Both operate commuter flights to remote areas where the companies’ activities take place.
Gina Cass-Gottlieb, Chair of the ACCC, said: «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».
She highlighted Alliance’s importance in that segment and its customer focus, and remarked: «Combining such an important player with Australia’s largest airline, Qantas, would be likely to substantially lessen competition and is something we oppose», Cass-Gottlieb said.
Qantas wants more information
For its part, Australia’s largest carrier requested a meeting with the ACCC to get more information about the decision. «Qantas remains confident the acquisition would not substantially lessen competition in any market», the company said in a press release.
For Qantas, opposition to the merger «is at odds with the increasingly competitive nature of the segment». It argues that competition in the Australian market is intensifying with the entry of new operators and the expansion of existing ones.
The airline claims that the acquisition of Alliance would allow it to better serve the resource sector, especially through the efficiencies that would be gained from combining similar fleets.
Qantas first expressed interest in a full acquisition in February 2019, when it acquired almost 20% of Alliance. In May 2022, it announced its intention to buy the remaining 80% to integrate the regional carrier into its domestic business.
The transaction would transfer all Alliance assets to Qantas. Among them, all Fokker 100, Fokker 70 and Embraer 190 aircraft, including those operated by Alliance for QantasLink.
