Qantas CEO sees solid case for Alliance acquisition

UPDATE – Qantas CEO Alan Joyce is optimistic that his airline will be granted the full acquisition of Alliance Airlines. The Australian Competition and Consumer Commission (ACCC) raised concerns in an interim ruling in August, but Joyce thinks the commission might lift its objections, he told AirInsight at the World Aviation Festival in Amsterdam. Qantas CEO sees solid case for Alliance acquisition.

Qantas said in May that it intended to acquire

the remaining 80.1 percent of Alliance Airlines, already owning the rest of the carrier. Alliance is an important asset to Qantas, as it has an agreement to wet-lease eighteen Embraer E190s to QantasLink for use on regional routes. The ACCC said in August it is concerned that a Qantas-Alliance combination will significantly lessen competition, notably in Queensland and Western Australia. The commission is supposed to make a final ruling on November 17, but Joyce said it could take some extra time. The ACCC says on its website that it wants allow parties more time and has set a new proposed date for its decision on December 1.

The CEO isn’t worried about the outcome, on the contrary: “We are still confident that we have a really good case with the competition authorities. Interestingly, there were only two red lights in the interim approval, areas of concern, and we are working through them to explain them to the ACCC. One of the concerns was that Qantas would have such a dominant position in the charter market. But one of our competitors, Rex Airlines which owns Cobham, said that’s essentially nonsense. There are low barriers to entry, they can be a real good competitor, they can offer lots of services. As a competitor, they discounted that I am sure the ACCC will take that on board. The customers of them are the big mining customers and they have countervailing market power. So we do believe there is a really strong case.”