The Australian Competition & Consumer Commission (ACCC) has opposed the acquisition of Alliance Aviation Services by Qantas Airways.
The country’s antitrust body considered that the agreement could reduce the level of competition in the air travel market in Australia.
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“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,” ACCC Chair Gina Cass-Gottlieb said.
“Qantas and Alliance currently compete strongly with each other in markets where there are few effective alternatives. The proposed acquisition would combine two of the largest suppliers of charter services in Western Australia and Queensland.”
The ACCC also pointed out that the two companies have a very strong presence in the “‘fly-in-fly-out'” transport segment, for workers from mining companies, which is considered an essential service.
“Combining such an important player with Australia’s largest airline, Qantas, would be likely to substantially lessen competition and is something we oppose,” Ms Cass-Gottlieb added.
Embraer and Fokker jets
The air transport market in Australia is heavily concentrated on Qantas, which faces competition from Virgin Australia and Jet Express, as well as other smaller airlines.
Alliance, at the same time, has expanded its operations, providing wet-leasing services to Qantas itself.
The company is the largest operator of Fokker 70 and 100 jets in the world and years ago decided to invest in Embraer E-Jets, bought second-hand.
Currently, the Alliance Airlines fleet comprises 71 aircraft, of which 14 are F70s, 25 are F100s and 32 are E190s.
