Australia’s Qantas-Alliance deal concerns may parallel JetBlue-Spirit approvals

The Covid-19 pandemic, like most crises, has sparked a wave of consolidation in the global airline industry. JetBlue Airways and Spirit Airlines plan to merge in the US, Avianca and Gol want to create a new South American giant, and, down under, Qantas Airways is trying to acquire charter and contract carrier Alliance Airlines. That last deal, Qantas’ A$614m ($426m) proposed purchase of Alliance, may be on ice after a preliminary statement Thursday from regulators. Australian Competition & Consumer Commission (ACCC) Chair Gina Cass-Gottlieb said the deal could “substantially lessen competition for air transport services to and from regional and remote areas in Queensland and Western Australia,” given Qantas’ existing dominance of the Australian market. Qantas, including its budget subsidiary Jetstar Airways, is Australia’s largest airline group with a 65% share of domestic passenger traffic in April, ACCC data show. Virgin Australia had a 31% share and Rex Airlines a little over 4%. Alliance and other airlines like it that provide contract flights, including critical “fly-in, fly-out” services for companies in Australia’s vast interior, amount to less than 1% of the domestic market. While Qantas’ overall dominance of the Australian market would be little changed with its acquisition of Alliance, it is flights to smaller destinations and in the “fly-in, fly-out” segment that has the ACCC concerned. “There are already significant barriers for airlines who want to enter or expand their operations in regional and remote areas, including access to pilots, airport facilities and infrastructure, and associated regulatory approvals. The removal of Alliance … is likely to significantly increase these barriers,” Cass-Gottlieb said.<br/>