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ACCC blocks Alliance Aviation-Qantas tie up
Nick Sundich, April 24, 2023
Alliance Aviation (ASX:AQZ), a charter airline, looked set to be acquired by Qantas, but the ACCC has put the plans on ice.
The competition regulator has indicated that will oppose the proposed deal due to concerns that the deal will lessen competition.
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Alliance Aviation
Qantas first acquired a 19.9% stake in Alliance Aviation in 2019 and made a bid for the balance of shares in May 2022.
Although the ACCC had previously declined to take action against the initial acquisition, it hit the brakes here.
It concluded that the deal would lessen industry competition in the industry, noting that both were amongst the largest suppliers of charter services in WA and Queensland.
What now?
Both companies expressed disappointment in the decision. Alliance Aviation told shareholders it would consider the ACCC’s decision and its options before deciding on its next step.
Qantas went further and told shareholders it formally requested a meeting with the ACCC and noted that there was significant industry competition, with customers having strong bargaining power in their negotiations with operators.
Qantas and Alliance Aviation both want the deal to go ahead, but it won’t without ACCC approval which clearly is not coming any time soon.
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