Qantas, Australia’s largest and flagship airline, has announced they have come to an agreement to fully acquire Alliance Airlines. The agreement will see Alliance Airlines become a wholly-owned part of the Qantas Group.
But who are Alliance Airlines?
Alliance Airlines are largely focussed on FIFO (fly-in, fly-out) services to mining sectors, with a small amount of RPT services. The airline has around 70 aircraft which seat up to 100 people, these include the Fokker 50, 70 and 100, in addition to a growing fleet of Embraer E190 aircraft. The airline has wet lease agreements with Qantas and Virgin Australia, supplying Fokker aircraft to Virgin and Embraer E190’s to Qantas.
Why does Qantas want to acquire Alliance?
As aforementioned, Alliance Airlines is a huge player in the mining FIFO sector, playing quite a large role in the operations of these mines and as such makes a large profit. Qantas already has a 19.9% stake in the airline, this agreement will see Qantas acquire the other 80.1% of the airline. It also means Qantas’ regional subsidiary, QantasLink, will have less competition in a largely competitave charter market.
What does this mean for the consumer & Qantas?
Qantas has made mention of the large benefits operating 18 of 33 E190’s has created, the airline having opened several new routes with the aircraft, creating lower fares and healthy competition in a largely untouched region of regional Australia. This will give Qantas the ability to continue to open new routes, with the remaining E190’s and potentially make a more streamlined experience for charter and/or FIFO operators.
What are the next steps?
Well, Qantas now needs to pass the Australian Competition and Consumer Commission (ACCC) for the agreement to go ahead, which will take several months. Given Virgin Australia has an amount of shares in Alliance, to be able to wet lease aircraft, there will no doubt with concerns to thwart and backlash to address.
What do you think?
I am excited by this proposition, though am also a little apprehensive with regards to the competition and it’s viability. But what do you think? Share your thoughts down below!
For Qantas Group CEO Alan Joyce’s comments and addition information, please don’t hesitate to check out the link below: