Qantas drops Alliance Aviation acquisition plan

An Alliance Aviation Embraer E190 lines up on the runway.
Mitchul Hope, CC BY-SA 2.0, via Wikimedia Commons

Qantas and Alliance Aviation Services Ltd (Alliance) have announced the termination of their May 2022 agreement for Qantas to fully acquire the Australian-based charter operator.

The initial agreement made in May 2022 was for Qantas to fully acquire the Australian-based charter operator.

The Background

Qantas’ ambitious acquisition of Alliance was met with mixed reactions. While the two aviation giants believed that this partnership could bring significant customer value, it faced opposition from the competition regulator in April 2023.

The regulatory body raised concerns about potential competition issues in the already highly competitive resources sector.

The crux of their argument lay in the combined fleet of F100 aircraft and whether it would have any adverse effects on the industry.


A Mutual Decision

After careful consideration, both Qantas and Alliance Aviation concluded that there was no reasonable path forward for the deal at present.

At this point, the Qantas Group will retain its shareholding of nearly 20 per cent of Alliance and will continue its long-term agreement that sees Alliance operate up to 30 E190s for the Qantas Group.

Qantas already boasts a considerable presence in the charter market, holding approximately 27 percent of the total charter market.

The national airline will continue to serve the growing resources sector through its existing charter operations.

Alliance, on the other hand, will continue its long-term partnership with the Qantas Group. This partnership includes the agreement for Alliance to operate up to 30 E190s on behalf the Group.

Despite the recent turn of events, both companies remain dedicated to their ongoing collaboration.

Expanding the Fleet

Qantas has also made a strategic decision to exercise options over four additional aircraft under its agreement with Alliance.

This move will increase the total number of E190s operated by Alliance for the Qantas Group to 26, with four additional options in reserve.

These extra aircraft are expected to be integrated into the Qantas fleet starting from April 2024.

Qantas Comments

In a statement regarding the agreement termination, Qantas Group Executive of Associated Airlines and Services, John Gissing, stated, “Alliance is an important partner for the Qantas Group, and the E190s have helped us open new routes across Australia.”

“These four new aircraft will provide additional capacity and connectivity in the domestic market.” His statement reflects the positive sentiment both companies share about their future collaboration.

Alliance’s Perspective

Alliance Airlines Managing Director Scott McMillan echoed this sentiment, saying, “Despite the outcome of the transaction, we look forward to continuing our long-standing and productive relationship with Qantas.”

This cooperative spirit suggests that the termination of the acquisition agreement hasn’t affected the overall relationship between the two companies.

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By Len Varley - Assistant Editor 3 Min Read
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