QF purchase of Alliance Airlines, VA's wet-lease agreement future in doubt

[simmomelb]

I don’t have any faith in the ACCC blocking it TBH. One of the most pathetic, toothless tiger organisations there is

They will be blocking it unless Qantas can prove that it won't lessen competition, that's really what it comes down to.
So now Qantas need to submit their reasoning why it won't lessen competition, and obviously Virgin, Rex, Alliance, Bonza, Link etc can also submit their views on this (for or against it).

 

[Saab34]

I would assume Virgin would have put up a very strongly worded case. However…

They are already changing contracts to Link and Air North. Actions mean more vs words.

 

[Mwenenzi]

QF newsroom media release (09:52 18-08-2022)--->QANTAS CONFIDENT ALLIANCE ACQUISITION NO RISK TO COMPETITION

 

[Saab34]

I don’t have any faith in the ACCC blocking it TBH. One of the most pathetic, toothless tiger organisations there is

Yes however they do have a newly installed boss at the helm. Fairly strong comments below, very hard to see how this can be flipped. I would be calling them those comments you mentioned if she can say the below now, then after 2 weeks of submissions changes her tune come November.

Virgin is pulling back it’s wet lease commitments with Alliance due to the arrangement. Whilst they have kept quiet, they are taking actions behind the scenes, pretty clear they are re positioning to continue operations minus its Alliance wet lease contracts.

In my book that’s reducing competition and leaving VA more vulnerable.

Our preliminary view is that 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 as a supplier of wet-leases or the increase in price of wet-leases for Qantas’ competitors is likely to significantly increase these barriers,” Ms Cass-Gottlieb said.

 

[simmomelb]

Virgin is pulling back it’s wet lease commitments with Alliance due to the arrangement. Whilst they have kept quiet, they are taking actions behind the scenes, pretty clear they are re positioning to continue operations minus its Alliance wet lease contracts.

In my book that’s reducing competition and leaving VA more vulnerable.

Yes however they do have a newly installed boss at the helm. Fairly strong comments below, very hard to see how this can be flipped.

I take this as, it will likely be rejected unless Qantas can come up with some incredibly convincing reasons as to why it's not lessening competition, which obviously would have already been submitted prior to today's announcement. So they'll need to bring something new to the table in their new submission for this to change.

 

[HS-TQE]

Considering the recent loading of VARA's -700s on the regional intra-Queensland routes (replacing the existing 738 mainline and the remaining Alliance F100s) from January, it does suggest that VA was planning to move away from Alliance for a long time now, which was also evident earlier with the wetlease of the Airnorth Embraer jets on the regional Queensland routes (alongside 738 mainline) instead of using Alliance.

 

[simmomelb]

There are routes that they pulled out of at the beginning of the pandemic, that they intend (intended) on returning under Alliance wet lease with their E-190's, such as Mildura - Melbourne. There was a submission for this earlier in the year to the ACCC, which was approved.
I'd be interested to know what is happening on those routes and their agreement with Alliance.
Many of these smaller routes only have 1 or 2 airlines now, when they had 3 prior to the pandemic, and this was due to return to pre covid competition with the help of Alliance.
That is definitely a lessening of competition if they are genuinely looking to proceed with this.

 

[HS-TQE]

There are routes that they pulled out of at the beginning of the pandemic, that they intend (intended) on returning under Alliance wet lease with their E-190's, such as Mildura - Melbourne. There was a submission for this earlier in the year to the ACCC, which was approved.
I'd be interested to know what is happening on those routes and their agreement with Alliance.
Many of these smaller routes only have 1 or 2 airlines, when they had 3 and this was due to return to pre covid competition with the help of Alliance.

I think the 'proposed' VA/Alliance partnership met the same fate as both Delta and (to a lesser extent) the Etihad partnerships, either ended (in Delta's case) or had massive cuts in Etihad's case. Etihad is now considered a 'secondary partner' of VA.

At this stage it's unlikely that VA will utilise the proposed partnership with Alliance (which was submitted to the ACCC) if at all.

 

[simmomelb]

I think the 'proposed' VA/Alliance partnership met the same fate as both Delta and (to a lesser extent) the Etihad partnerships, either ended (in Delta's case) or had massive cuts in Etihad's case. Etihad is now considered a 'secondary partner' of VA.

At this stage it's unlikely that VA will utilise the proposed partnership with Alliance (which was submitted to the ACCC) if at all.

That's is a little different, as they have to an extent, swapped Etihad with Qatar (both still exist for now), and Delta with United,

What have they swapped Alliance with on the routes that Virgin pulled out of that they previously flew their E190's on (not referring to any FIFO)?

 

[HS-TQE]

That's is a little different, as they have to an extent, swapped Etihad with Qatar (both still exist for now), and Delta with United,

What have they swapped Alliance with on the routes that Virgin pulled out of that they previously flew their E190's on?

As was pointed out previously, Airnorth have started utilising their leased E190s on many VA services to TSV and some DRW services, and to a lesser extent the E170s to other Queensland ports.

Also earlier in this thread, VA through VARA has loaded the 737-700s on some intra-Queensland regional routes starting in January 2023, replacing the 738 mainline and the remaining Alliance F100 services.

Thus assuming that VARA with Airnorth are taking over what's remaining of the Alliance flying.

 

[simmomelb]

As was pointed out previously, Airnorth have started utilising their leased E190s on many VA services to TSV and some DRW services, and to a lesser extent the E170s to other Queensland ports.

Also earlier in this thread, VA through VARA has loaded the 737-700s on some intra-Queensland regional routes starting in January 2023, replacing the 738 mainline and the remaining Alliance F100 services.

Thus assuming that VARA with Airnorth are taking over what's remaining of the Alliance flying.

I don't think this covers many of the other routes they've pulled out of though which were to be returned under Alliance.
For example, I haven't seen anything proposed for the Victorian routes - unless you have? There is no submission to the ACCC for this, only for Alliance still.
I'll see if I can find anything further online, but there isn't anything in their respective media releases.

 

[Harrison_133]

As was pointed out previously, Airnorth have started utilising their leased E190s on many VA services to TSV and some DRW services, and to a lesser extent the E170s to other Queensland ports.

The Airnorth flying was temporary and has already stopped, and the E170s were never used on VA services to other ports.

Also earlier in this thread, VA through VARA has loaded the 737-700s on some intra-Queensland regional routes starting in January 2023, replacing the 738 mainline and the remaining Alliance F100 services.

The all economy 737-700 flying out of BNE actually hasn’t replaced any Alliance F100 services — ROK & NTL are still F100. And at this stage, they’re listing Virgin Australia as the operating carrier, not VARA. That applies to the Perth flights too.

In the GDS it looks like they’re using the code “73G” for the Y138 configuration and the existing “73W” code for the J8Y120 configuration. On BNE-ADL/CNS/HBA/TSV (for example), both the all-Y and J equipped aircraft are used.

I can see a shift away from Alliance happening if the deal with QF passes. The -700s will be useful, and I wouldn’t be surprised if Link play a larger role. Its interesting they’re starting to swoop in on routes previously flown by Virgin’s ATRs (BNE-BDB & SYD-TMW).

 

[Saab34]

Isn’t the -700 more about reducing -800 capacity which might have otherwise been too big for a said route?

 

[servicerequired]

I think the fact that Qantas already have 14 aircraft wet leased from Alliance - and a 20% stake in the company - is more than enough for Virgin to seek an alternate solution.

 

[simmomelb]

It doesn't matter how many aircraft they are wet leasing to Qantas or Virgin, it's almost meaningless from a competition perspective, it's down to who owns it, 19.9% and Qantas has currently no controlling position on the Alliance board, they are effectively no different to you or I owning $100 of shares.
Once it is 50.1% to 100% under their ownership, there goes competition, which is where the issue is.
It's half way through the process, now it's up to Qantas to prove it won't hamper competition. It's what is best for consumers, not their business

 

[Mitch_W]

So its the 18th. Any verdict on this???

 

[simmomelb]

So its the 18th. Any verdict on this???

See the last 20 posts or so

 

[Mitch_W]

Fair enough. My browser didn’t update for some reason.

 

[Saab34]

I wonder if QF will sell the stake and walk away should it be declined? I’ve seen a few companies in my time head backwards after these big sort of deals are not followed through. It’s no trade secret that QQ are having some employee retention problems at the moment. They have already lost the CEO I think.