Qantas Airways has decided to abandon its plans to acquire local charter operator Alliance Aviation Services, following opposition from Australia’s competition regulator. The agreement, which was initially established in May 2022, involved an all-stock deal that valued Alliance at approximately AUD 763.5 million (USD 483.9 million) at the time.
The Australian Competition and Consumer Commission (ACCC) expressed concerns about the deal in April 2023. According to the ACCC, Qantas and Alliance are both crucial suppliers for resources companies that rely on transporting fly-in, fly-out workers in Western Australia and Queensland. The ACCC argued that the proposed merger would significantly reduce competition in this sector.
In response to the ACCC’s concerns, Qantas has agreed to terminate the agreement, stating that there is currently no reasonable path forward for the deal. However, Qantas will continue to serve the resources sector through its existing charter operations. The airline already holds approximately 27% of Australia’s total charter market.
As part of its ongoing commitment to the sector, Qantas plans to exercise options for four additional aircraft under its existing long-term charter agreement with Alliance. This will bring the total number of E190 aircraft operated by Alliance for Qantas to 26, starting from April 2024. Qantas still holds four more options under this agreement.