Competition watchdog rejects Qantas’ acquisition of Alliance

The Sydney Morning Herald2023-04-20

Qantas Airways will be barred from acquiring private charter flight provider Alliance Aviation after the Australian Competition and Consumer Commission (ACC) said the transaction would likely lessen ...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nCompetition watchdog rejects Qantas’ acquisition of Alliance\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-04-20 09:24 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.smh.com.au/business/companies/competition-watchdog-rejects-qantas-acquisition-of-alliance-20230420-p5d1wq.html><strong>The Sydney Morning Herald</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Qantas Airways will be barred from acquiring private charter flight provider Alliance Aviation after the Australian Competition and Consumer Commission (ACC) said the transaction would likely lessen ...</p>\n\n<a href=\"https://www.smh.com.au/business/companies/competition-watchdog-rejects-qantas-acquisition-of-alliance-20230420-p5d1wq.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4215","symbol_name":"住宅房地产投资信托","start_time":0,"source_url":"https://www.smh.com.au/business/companies/competition-watchdog-rejects-qantas-acquisition-of-alliance-20230420-p5d1wq.html","article_id":"2328763412","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2328763412","pubTimestamp":1681953840,"sourceInfo":{"source_id":"smh_stock","name":"Sydney Morning Herald"},"weMediaInfo":null,"summary":"Qantas Airways will be barred from acquiring private charter flight provider Alliance Aviation after","collect":0,"end_time":0,"defaultTopTitle":"smh.com.au","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4215":"住宅房地产投资信托","XKO.AU":"标普/澳交所 300指数","XJO.AU":"标普/澳交所 200指数","QAN.AU":"QANTAS AIRWAYS LIMITED","XAO.AU":"标普/澳交所 普通股指数","BK7030":"航空公司"},"translate_title":"竞争监管机构拒绝澳航收购Alliance","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"ACC":1,"QAN.AU":1,"XAO.AU":0.9,"XJO.AU":0.9,"XKO.AU":0.9},"content_text":"Qantas Airways will be barred from acquiring private charter flight provider Alliance Aviation after the Australian Competition and Consumer Commission (ACC) said the transaction would likely lessen competition and lead to increased flight prices and reduced service quality for fly-in-fly-out workers.On Thursday, ACCC chair Gina Cass-Gottlieb announced the watchdog would oppose Qantas’ proposed acquisition based on an investigation that found resource-industry customers in Western Australia and Queensland would take a hit if the transaction went ahead.Qantas said it would seek more information from the ACCC about its decision and maintained the transaction would not substantially lessen competition.Credit: Oscar Colman“Qantas and Alliance currently strongly compete with each other in markets where there are few effective alternatives,” Cass-Gottlieb said.“The proposed acquisition would combine two of the largest suppliers of charter services in Western Australia and Queensland. 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.”The ACCC flagged in August that it had preliminary concerns with Qantas’s proposed acquisition.LoadingAlliance is an aviation services company based in cities including Brisbane, Townsville, Cairns and Perth, specialising in the provision of private charter flight services to corporate customers, and leasing aircraft and associated services to other airline customers. It represents about 2 per cent of the total aviation industry and supplies 30 per cent of charter services, with the remainder split between Qantas (which owns about 23 per cent), Virgin (which owns 22 per cent) and a number of smaller operators.Cass-Gottlieb said the company was strongly valued by customers as a vigorous and effective competitor with a large fleet capacity and high-quality service offerings, including the highest on-time performance in the industry.“Alliance doesn’t sell seats on major passenger routes, so many Australians may not have heard of them, but it is one of Australia’s most significant airlines, with 70 aircraft currently and more on order,” Cass-Gottlieb said.“Combining such an important player with Australia’s largest airline, Qantas, would be likely to substantially lessen competition and is something we oppose.”While the ACCC considered the level of competition provided by other players, Cass-Gottlieb said that neither existing airlines such as Virgin Australia and National Jet Express, nor a new entrant, would likely have the capacity to expand quickly enough to a scale that would make up for the loss of competition resulting from the proposed acquisition.Alliance managing director Scott McMillan said he was disappointed by the ACCC’s decision and believed there was “strong industrial logic” for the acquisition.Credit: Attila Csaszar“Qantas will face limited competition if allowed to acquire Alliance because most other airlines lack the right aircraft, fleet size, or capabilities needed to compete effectively,” Cass-Gottlieb said.“Airlines wanting to enter or expand at scale face a combination of barriers, including incumbency advantages, the need to establish a reputation for providing a reliable service, access to and training of air crew and engineers, access to suitable aircraft and infrastructure, and the significant regulatory requirements to fly. This combination of factors makes it very difficult for smaller airlines to win significant customer contracts and grow their business.”In 2019, Qantas announced it had acquired a 19.9 per cent holding in Alliance Aviation – a move the ACCC decided not to take enforcement action against. On May 5, 2022, Qantas announced that it had reached an agreement to acquire the remaining shares in Alliance that it does not already own.The ACCC previously released a statement of issues with its concerns about the acquisition in August, following submissions from groups including rival airline Regional Express and the Transport Workers Union.However, Qantas is not the only airline which has been angling to expand their charter service offering. In July, Rex acquired charter operator National Jet Express from Cobham Aviation, receiving ACCC clearance 11 days later.In an announcement to the ASX, Qantas said it would seek more information from the ACCC about its decision and maintained the transaction would not substantially lessen competition.“The airline has requested a meeting with the ACCC to understand its decision, which is at odds with the increasingly competitive nature of the segment and views expressed by a competitor that the acquisition would not lessen competition,” the company said.Loading“As the ACCC has previously acknowledged, customers in the resources segment are sophisticated and well-resourced with procurement expertise and strong bargaining power in their negotiations with airlines and other operators. The proposed acquisition would enable Qantas to service this important sector better, particularly through the efficiencies unlocked through a combined fleet of similar aircraft.”Alliance managing director Scott McMillan said he was disappointed by the ACCC’s decision and believed there was “strong industrial logic” for the acquisition.“We remain of the view that ... the proposal does not substantially lessen competition,” McMillan said. “We also think there is a compelling case that the proposed transaction will lead to superior outcomes both for Alliance shareholders and for our customers.”The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2328763412"}