Qantas has purchased a 19.9% stake in Australian charter and regional carrier Alliance Airlines—a move that raised concerns by rival Virgin Australia, which has a long-standing partnership with Alliance.
Qantas acquired the Alliance shares for A$60 million ($43.6 million) with a long-term aim of taking a majority stake in the airline, the Australian flag carrier said Feb. 1.
The move appears to have surprised the Alliance board, which said it had “not received any approach from Qantas” before the share purchase.
Qantas said it “expects to ultimately seek regulatory approval” from competition regulators “to build on its current shareholding, with a longer-term view of taking a majority position in Alliance Airlines in order to better serve the charter market.”
Alliance has been “a long-term provider to the Qantas Group and flies regional services on behalf of the national carrier,” Qantas said.
Alliance also has deep connections to Virgin Australia, however. In 2016, Virgin and Alliance signed a long-term strategic partnership enabling them to jointly compete for charter business.
Responding to the Qantas move, Virgin said its rival’s announcement “raises significant concerns and we will be looking closely at the potential impact to competition in the domestic market.”
Virgin said it remains committed to the Alliance partnership.
“Our close commercial relationship with Alliance is important to a strong competitive aviation market, including for regional services in Queensland and charter … services supporting the mining industry,” the carrier said…