Qantas announces intention to acquire the remaining 80% of Alliance (ASX:AQZ)

[justinbrett]

It might, it might not. Question is if Qantas sees value then someone else might (private equity perhaps) too if the deal falls over

Bain?

 

[HS-TQE]

Bain?

PAG or 777

 

[Flying Uke]

Does this mean I will get FF points and SCs for my weekly charter flight to work? We did get them when Ansett took over from Flight West many years ago. Can I use the Qantas Club while waiting for my charter? If yes to all these I am firmly in support of the takeover.

 

[justinbrett]

Does this mean I will get FF points and SCs for my weekly charter flight to work? We did get them when Ansett took over from Flight West many years ago. Can I use the Qantas Club while waiting for my charter? If yes to all these I am firmly in support of the takeover.

No, QF don't give out points to charter flights. I guess lounge access would depend on the charter contract.

 

[Franky]

It might, it might not. Question is if Qantas sees value then someone else might (private equity perhaps) too if the deal falls ov

It might, it might not. Question is if Qantas sees value then someone else might (private equity perhaps) too if the deal falls over

Isn't that the same as saying it’s a 50% chance?

 

[RooFlyer]

The Oz on-line reporting that the Transport Workers Union making moves to get the acquisition of Alliance blocked:

Union flags higher regional airfares if ACCC allows Qantas-Alliance deal
In part:

The Transport Workers Union has told the competition watchdog the sale of Alliance Aviation to Qantas would mean higher fares and poorer service for regional travellers and FIFO workers.

The Australian Competition and Consumer Commission is examining the proposed $614m deal ahead of its final verdict due in December.

Qantas CEO Alan Joyce first made it known he was interested in acquiring Alliance in early 2019 after taking a 19.9 per cent stake in the smaller operator.

An acquisition agreement with Alliance was reached in May this year, with an offer of $4.75 worth of Qantas shares for each Alliance share held.

... but they would say that, wouldn't they?

 

[Saab34]

Alan will have unions coming at him left right and centre over the next year or two.

His biggest ground handling agent has already given in. I doubt he was happy with that one. Jetstar Engineers are underway at the moment. Jetstar Pilots will be the next big one.

Rex seem to have successfully negotiated a new agreement with the unions just now also.

Certainly is a my way or highway approach within the Roo. I think the FWC will be making the decisions in some of these long expired EBAs.

 

[jase05]

I wouldn’t listen to anything the TWU recommended

 

[TheInsider]

Alan will have unions coming at him left right and centre over the next year or two.

His biggest ground handling agent has already given in. I doubt he was happy with that one. Jetstar Engineers are underway at the moment. Jetstar Pilots will be the next big one.

Rex seem to have successfully negotiated a new agreement with the unions just now also.

Certainly is a my way or highway approach within the Roo. I think the FWC will be making the decisions in some of these long expired EBAs.

Also the ASU with all their ground staff, some freight staff, call centre, and some operations staff in SYD.

 

[HS-TQE]

ACCC decision on the proposed QF takeover of QQ is set on 1st December

Interestingly REX is actually in favour of the proposed QF takeover.

There have been suggestions from users on other forums considered silly such as PAG/Rex 'positioning' themselves for the current QQ F100/VA work should the QF takeover be approved, but who knows?

Qantas’ proposed acquisition of Alliance Airlines.

On 1 February 2019, Qantas Airways Ltd (Qantas) announced it had acquired a 19.9 per cent holding in Alliance Aviation Services Ltd (Alliance). On 5 May 2022, Qantas announced that it had reached an agreement to acquire the remaining shares in Alliance that it does not already own.

www.accc.gov.au

 

[AIRwin]

Not a QF flight delay but ACCC decision:

https://www.qantasnewsroom.com.au/media-releases/qantas-statement-on-accc-delay/

 

[Saab34]

You would think they would be happy about a delay, considering the negative dialogue the ACCC put forward a few months ago which almost guaranteed it wasn’t going to be approved. Perhaps longer is better, ie they are looking more into it, Rex probably contributed to that being the only operator to put support behind it, the regulator now digging deeper into Rex reasoning to get a balanced view considering most submissions to this would be negative.

 

[Jean Prouvaire]

https://www.qantasnewsroom.com.au/media-releases/qantas-statement-on-accc-delay/

The Commission has also had the benefit of over two years of closely monitoring the domestic aviation industry.

And there's certainly been nothing of note affecting the domestic aviation industry in the last two years, right?

This would make it one of the longest processes for informal clearance in recent times. This compares with the 11 days it took the ACCC to decide it didn’t need to conduct a public review of Rex’s acquisition of National Jet Express from Cobham in July this year.

Because there's no difference between a player the size of Rex (market cap of around $150M) wanting to take over a competitor on the one hand, and Qantas - with its ~$7,000M market cap, ie about 50 times that of Rex, and its 60-something% domestic market share - wanting to take over a competitor on the other hand.

 

[RooFlyer]

ACCC has rejected, or rather will oppose, Qantas' takeover of Alliance.

Qantas’ proposed acquisition of Alliance Airlines.

On 1 February 2019, Qantas Airways Ltd (Qantas) announced it had acquired a 19.9 per cent holding in Alliance Aviation Services Ltd (Alliance). On 5 May 2022, Qantas announced that it had reached an agreement to acquire the remaining shares in Alliance that it does not already own.

www.accc.gov.au

In part:

The ACCC is concerned that the proposed acquisition will have the following negative impacts on competition: a. lead to significant concentration and the removal of Alliance as a strong competitive constraint on Qantas in an already concentrated industry, with Qantas and Alliance being two of the top three operators in regional and remote Queensland and Western Australia. Relevantly, Qantas and Alliance own more than half of all medium-sized aircraft with around 60 to 160 seats in Australia. For smaller aircraft, which are also used to service these locations, Qantas and Alliance both have significant fleets;

and

Further, the proposed acquisition will likely increase barriers to entry and expansion by removing Alliance as a major supplier of aircraft wet-leasing services in Australia. Qantas has stated it will not continue Alliance’s current leasing arrangements with rival airlines post-acquisition.

Given the significant barriers above, the ACCC does not consider that the loss of competition arising from the proposed acquisition is likely to be replaced by the timely entry of new players or the expansion of existing providers.

 

[HS-TQE]

Would be good news for VA/Bain then. Not so much for REX/PAG who were in support and were rumoured at using their National Jet Express subsidiary to look at picking up some VA work.

 

[justinbrett]

I guess QF is about to buy a whole bunch of E190s

 

[simmomelb]

I guess QF is about to buy a whole bunch of E190s

They'll just wet lease them as previously agreed in the Alliance contract, that is not impacted and is not conditional on them buying Alliance.
No need to buy them.

 

[justinbrett]

They'll just wet lease them as previously agreed in the Alliance contract, that is not impacted and is not conditional on them buying Alliance.
No need to buy them.

They can achieve the same effect of the merger by buying the aircraft, poaching the crew and setting up a new QF owned subsidiary.

Isn’t that the whole reason QF wanted to buy them? If it was more economical to wet lease they would have just left it at that.

 

[Mwenenzi]

QF news release

https://www.qantasnewsroom.com.au/media-releases/qantas-seeks-more-information-on-acccs-alliance-aviation-decision/

Qantas will seek more information from the Australian Competition and Consumer Commission (ACCC) about its decision to oppose the planned acquisition of Alliance Aviation Services Ltd (ASX: AQX) (Alliance). Qantas remains confident the acquisition would not substantially lessen competition in any market.

As well as reviewing the announcement released today, the airline has requested a meeting with the ACCC to understand its decision, which is at odds with the increasingly competitive nature of the segment and views expressed by a competitor[1] that the acquisition would not lessen competition.
<snip>

 

[simmomelb]

They can achieve the same effect of the merger by buying the aircraft, poaching the crew and setting up a new QF owned subsidiary.

Isn’t that the whole reason QF wanted to buy them? If it was more economical to wet lease they would have just left it at that.

When they signed the contract, which was after preliminary concerns raised by the ACCC, they already knew it was unlikely to go through, the legal team at QF aren't naive, they are a well oiled machine in respect to mergers and acquisitions.
Buying Alliance would have allowed to them to wet lease to Virgin and others, as Alliance do now, a completely different business model.
A lot of airlines prefer to lease or wet lease some of their aircraft, it can be much better for the books.