Australian regulator raises competition concerns on Qantas buying out charter operator

Australia's competition regulator said on Thursday that Qantas' proposed purchase of the remainder of charter operator Alliance Aviation Services for A$610.8m ($423.41m) raised concerns. "We are concerned that this proposed acquisition is likely to substantially lessen competition for air transport services to and from regional and remote areas in Queensland and Western Australia for corporate customers," Australian Competition and Consumer Commission (ACCC) Chair Gina Cass-Gottlieb said. Alliance shares slumped 6.5% in early trading following her comments. A final decision is expected in November, the ACCC said. Qantas has owned 20% of Alliance since 2019 but buying the remaining 80% would give it a dominant share of flying for resources industry customers, a market in which it competes against Virgin Australia and Cobham's National Jet Express, soon to be owned by Regional Express Holdings. Many mining and oil and gas companies in Australia staff their operations using a fly-in/fly-out (FIFO) model rather than permanently basing their employees at remote sites, making the flying a lucrative business for airlines. Qantas has offered Alliance investors A$4.75 a share for the remainder of the company in an all-stock deal. Alliance shares had closed at A$3.55 on Wednesday, indicating investor scepticism that the regulator would approve the transaction.<br/>