Alliance bid hits heavy weather as ACCC raises Qantas concerns
The takeover of Queensland Alliance Aviation by Qantas has hit turbulence with the competition regulator raising preliminary concerns about the potential loss of competition.
Qantas's string of disasters has prompted the government to consider a travel watchdog. (Image: Supplied)
In May Qantas announced a $600 million all-scrip deal whereby shareholders would receive $4.75 in Qantas shares for each Alliance share held. Qantas already held a 19 per cent stake in the company.
But the Australian Competition and Consumer Commission chair, Gina Cass-Gottlieb, said the regulator was concerned the deal was likely to substantially reduce competition for air transport services to and from regional and remote areas in Queensland and Western Australia for corporate customers.
The reference is related to Alliance’s strong role in delivering services to the mining sector and related communities. The takeover would remove Alliance as the only competitor to Qantas on the Brisbane to Moranbah regional passenger transport route.
“This merger would combine two of the top three operators of air transport services in Queensland and Western Australia,” Cass-Gottlieb said.
“Industry participants have expressed strong concerns about the impact of this proposed acquisition on air transport services, particularly to regional and remote areas.”
The ACCC said it was also considering the level of competition provided by other airlines and how the removal of Alliance’s aircraft leasing services would impact the ability of current and new entrants to compete against Qantas on regional routes.
There was also concerns about the impact of the potential loss of Alliance’s wet-leases which were deals with other airlines to provide aircraft and crew and other services.
“Our preliminary view is that there are already significant barriers for airlines who want to enter or expand their operations in regional and remote areas, including access to pilots, airport facilities and infrastructure and associated regulatory approvals,” Cass-Gottlieb said.
“The removal of Alliance as a supplier of wet-leases or the increase in price of wet-leases for Qantas’s competitors is likely to significantly increase these barriers.”
Submissions on the issue were invited and the ACCC would make a final decision on November 17.