Qantas in sights of ACCC

Competition watchdog examines Alliance stake

AUSTRALIA’S consumer watchdog says it is continuing to investigate competition concerns from Qantas buying a stake in competitor Alliance Aviation last year.

“The Australian aviation industry is in a state of major upheaval and now, more than ever, we are concerned that competition by smaller airlines is not hindered,” it said in a statement yesterday.

The ACCC said it would continue to seek information from market participants to gauge any impacts on competition arising from the Qantas stake in Alliance. The competition watchdog launched an investigation in August 2019, months after Qantas acquired a 19.9 per cent stake in Alliance.

Qantas has said it will seek approval to increase its shareholding and has plans to be the majority owner of the carrier.

“Qantas’ decision to complete the acquisition of the 19.9 per cent stake in Alliance without first seeking ACCC clearance means this is an enforcement investigation rather than a standard merger review,” ACCC chairman Rod Sims ( pictured) said.

Brisbane-based Alliance has particularly challenged Qantas in regional markets and by providing fly-in, fly-out services for mining companies.

The watchdog says the move could reduce supply of these charter services, and regular passenger services.

The ACCC is investigating whether the Qantas stake affects Alliance’s ability to raise funds, consider takeovers or participate in commercial ventures, and whether Qantas is attempting to exert influence on Alliance’s decision-making or operations.

“The Australian aviation industry remains highly concentrated and it is crucial that competition provided by smaller airlines is maintained long-term,” Mr Sims said.

The watchdog also said any further increase in Qantas’ s’ stake in Alliance was “very y likely to raise competition con- cerns under the Competition n and Consumer Act”.

It said it would consider enforcement action if there was evidence that Qantas’ shareholding was compromising Al- liance’s ability to be a strong g competitor to Qantas.

Qantas shares were 0.5 per r cent higher at $4.01 yesterday. Alliance shares were down 1.13 per cent at $2.62.