QF Buys into Alliance

[Standby]

Interesting stuff
QANTAS ACQUIRES 19.9 PER CENT STAKE IN ALLIANCE AIRLINES

 

[eastwest101]

Blocking stake to prevent someone else from buying the business?

I am wondering if QF are buying the Alliance business for the mining contracts or maybe are seeking to buy the workforce or AOC, I would bet that the pilot shortage will have something to do with this.

 

[TheInsider]

Also Alliance released a statement saying they knew nothing about it:
https://www.asx.com.au/asxpdf/20190201/pdf/4429n12rgqwlp7.pdf

 

[AIRwin]

Qantas' acquisition of Alliance Airlines up in the air

 

[rock86]

Also Alliance released a statement saying they knew nothing about it:
https://www.asx.com.au/asxpdf/20190201/pdf/4429n12rgqwlp7.pdf

Well, QF aren't obliged to say anything to them under the Corps Act until the 20% threshold is reached.

 

[Bagpuss]

I actually thought that VA would at some point buy out Alliance but I could see why the ACCC would block it.

I wouldn't be surprised if this gets blocked by the ACCC if they want to conduct a higher buy-out.

My take is that QF is trying to disrupt Alliance and Virgin partnerships.

 

[DC3]

Well, QF aren't obliged to say anything to them under the Corps Act until the 20% threshold is reached.

Snap

 

[moa999]

You're obliged to report any time over 5%.
It appears though that Qantas bought two large blocks of shares.

12% from Austrian Airlines !
8% from Perpetual

Austrian got the shares in 2015 when Alliance bought their Fokker fleet - and have done pretty well given the AQZ share price
Alliance acquires Austrian Airlines' Fokker fleet - Australian Aviation

 

[rock86]

Your obliged to report any time over 5%.
It appears though that Qantas bought two large blocks of shares.

12% from Austrian Airlines !
8% from Perpetual

Austrian got the shares in 2015 when Alliance bought their Fokker fleet - and have done pretty well given the AQZ share price
Alliance acquires Austrian Airlines' Fokker fleet - Australian Aviation

Aren't you only obliged to lodge the substantial holdings notice with ASIC?

I was more focusing on the dealings between the two companies (and shareholders to an extent) directly, which is only required over the 20% wouldn't it?

 

[moa999]

ASX not ASIC.. but once you lodge it becomes public so the company knows about it.

20% is where the Corps Law comes into play.
Essentially limiting further acquisitions (other than creeping 3% every 6 months) unless you make a takeover bid.

 

[Isochronous]

Does Alliance do more work for QF or VA at the moment?

 

[Saab34]

VA.

Which is why I hope they fight this off as this is a continued push for further QF attempting to monopolise the market. I don’t think this is good for the industry long term.

 

[ozfflyer]

Blocking stake to prevent someone else from buying the business?

I am wondering if QF are buying the Alliance business for the mining contracts or maybe are seeking to buy the workforce or AOC, I would bet that the pilot shortage will have something to do with this.

yes but many airlines are already cutting back so any pilot shortage will disappeart fast.

 

[ozfflyer]

VA.

Which is why I hope they fight this off as this is a continued push for further QF attempting to monopolise the market. I don’t think this is good for the industry long term.

how on earth could the ACCC approve further Qantas share purchases of Alliance ?

 

[Isochronous]

how on earth could the ACCC approve further Qantas share purchases of Alliance ?

Perhaps the lure of the CL?

 

[wannabeinvestmentbanker]

From what I understand, Alliance serves a fairly niche area of the market likely with corporate contracts setup so I wouldn't say this would lessen competition in the market as its a charter/leasing company not directly competing with QF. It would be more problematic if they were aggressively acquiring REX and lessening regional competition.

Would've been a nice juicy trade to cross. If Perpetual are exiting and have such a big stake that they would get a lot of corporate interaction, I wouldn't be touching it. I generally agree with Warren Buffett's sentiment to never invest in airlines.

 

[RB]

Currently Allaince do the PQQ-BNE run with the flights booked through Virgin. I guess the chess games continue

 

[ozfflyer]

Currently Allaince do the PQQ-BNE run with the flights booked through Virgin. I guess the chess games continue

& taking over Virgins POM flights + some others ... port macqaurie I think

 

[Mattg]

The ACCC is now saying that is has serious competition concerns and is running an ongoing enforcement investigation into Qantas' acquisition of Alliance Airlines. The ACCC is particularly concerned because Alliance is QF's only competition on some regional routes.

Investigation into Qantas's stake in Alliance Airlines continues

The ACCC is continuing to investigate Qantas Airways’ (Qantas) (ASX:QAN) acquisition of a 19.9 per cent stake in Alliance Aviation (Alliance) (ASX:AQZ) during these uncertain times in the aviation industry.

www.accc.gov.au

 

[large]

From The ABC yesterday:

Qantas under investigation
The competition watchdog is investigating whether Qantas broke the law when it bought a substantial stake in a competing airline without first seeking "informal merger clearance".

In February 2019, Qantas bought nearly 20 per cent of Brisbane-based Alliance Airlines, which makes it the biggest shareholder.

The smaller airline mainly provides charter flights for mining companies and their fly-in, fly-out (FIFO) workers across Queensland, Western Australia and the Northern Territory.

But now, more than a year later, the Australian Competition and Consumer Commission (ACCC) said it has "preliminary" concerns about the deal.

"We consider this shareholding has the potential to impact Alliance's future growth and its ability to be a strong competitor," ACCC chairman Rod Sims said.

"It may impact Alliance's ability to grow through raising funds from investors, or to consider rival takeover approaches.

"In our view, any move by one company to acquire and build on a significant stake in a close competitor is likely to raise competition issues, due to the potential for the two businesses to compete less vigorously, or to influence each others' strategies or outcomes."

The regulator said its investigation is continuing, and it could take Qantas to court if it believes the airline breached competition laws.

Qantas said it is cooperating with the ACCC's probe, but has disputed some of the regulator's comments.

"The shareholding is entirely passive," Qantas wrote in a statement.

"Qantas has not sought board representation and has had no influence on the management of Alliance Aviation.

"The shareholding has given Qantas more exposure to earnings from the resources sector, which is one of the few bright spots in the current domestic market and is primed for further growth."

Qantas shares closed 0.5 per cent higher $4.01, after a volatile day spent mostly in the red.