October 1, 2022


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Acquisition of Qantas (QAN) Alliance Australia raises considerations at ACCC

Australia’s competitors watchdog has expressed preliminary considerations about Qantas’ proposed acquisition of Alliance Aviation Companies, arguing that the takeover is more likely to considerably scale back competitors for air transport companies in distant and regional areas.

In an announcement of points issued Thursday, Australia’s Competitors and Shopper Fee responded to Qantas’ $614 million proposal to amass the ASX-listed fly-in fly-out airline forward of a ultimate determination in November.

A ultimate determination on the deal will probably be made in November. Recognition:Kate Geraghty

Representing roughly 2 % of the overall aviation trade, Alliance Aviation Companies is used primarily by mining and useful resource firms that want to move employees in Queensland and Western Australia. It gives 30 per cent of constitution companies, with the rest cut up between Qantas (which owns about 23 per cent), Virgin (which owns 22 per cent) and quite a lot of smaller operators.

Qantas acquired a 19.9 % stake in Alliance Aviation Companies in 2019. In Might, Qantas introduced that it had reached an settlement with Alliance to amass the remaining 80 % stake and filed an utility with the ACCC. Beneath the proposal, Alliance shareholders would obtain $4.75 value of Qantas shares for each Alliance share, which is at present value $3.34.

If profitable, the merger will deliver collectively two of the three largest air transport operators in Queensland and Western Australia. It will additionally get rid of Alliance as Qantas’ sole competitor on the Brisbane-Moranbah regional passenger route.

“We’re involved that this proposed acquisition is more likely to considerably scale back competitors for air companies to and from regional and distant areas in Queensland and Western Australia for company clients,” Gina Cass-Gottlieb, chair of ACCC, mentioned on Thursday.

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Qantas isn’t the one airline seeking to broaden its constitution providing. In July, Rex acquired constitution operator Nationwide Jet Categorical from Cobham Aviation and acquired ACCC approval 11 days later. Virgin Australia has additionally expressed a want to amass new plane to broaden its personal flight capabilities.

The ACCC mentioned they’re contemplating Virgin’s degree of competitors, in addition to Cobham’s current acquisition of Rex and the way the termination of Alliance’s plane leasing companies would have an effect on the flexibility of present and new airways to compete in opposition to Qantas on regional routes

https://www.smh.com.au/enterprise/firms/accc-flags-concerns-with-qantas-s-proposed-takeover-of-alliance-australia-20220818-p5bas9.html?ref=rss&utm_medium=rss&utm_source=rss_business Acquisition of Qantas (QAN) Alliance Australia raises considerations at ACCC