February 3, 2019

Qantas acquires Alliance Air stake

Qantas has begun a long-term play to take a majority stake in charter carrier Alliance Airlines with a 19.9% stake worth AUD60 million ($44 million).

The Australian flag carrier announced on 1 February the investment at an average per share price of AUD2.40 in Brisbane-based Alliance, which provides significant fly-in, fly-out uplift in Western Australia and Queensland.

Alliance is being advised by Catapult Partners on the financial side and law firm Herbert Smith Freehills.

Alliance already partners with QantasLink, operating regional services with a fleet of Fokker aircraft on QLink’s behalf.

The airline also has a partnership with Virgin Australia to work together in charter and fly-in, fly-out markets until 2022.

… deal could spell problems for Virgin

Alliance started in 2002 essentially through acquisition of some of the assets of collapsed regional Queensland carrier Flight West Airlines by a group of local aviation entreprenuers.

Since then, the independent operator has established itself as the major player in the resource charter market across the country, building up its fleet of Fokker aircraft in the process.

Alliance has also conducted charter work on behalf of government agencies, tour operators and for sporting teams.

Virgin potentially has much to lose should Qantas gain control of Alliance, giving Virgin an incentive to take at least a 10% stake in Alliance to try and block a full takeover, potentially sparking a bidding war.