Alliance losing patience with ACCC over probe into Qantas stake deal
Scott McMillan with Alliance Airlines CEO Lee Schofield Picture: Lyndon Mechielsen
Charter operator Alliance Airlines is losing patience with the competition watchdog, as an investigation into a 19.9 per cent share acquisition by Qantas nears the one-year mark. Alliance Airlines managing director Scott McMillan said he was constantly being asked about the progress of the investigation, which began in February last year, shortly after Qantas made the surprise move.
As well as buying a 19.9 per cent stake in Alliance, Qantas CEO Alan Joyce told staff his long-term plan was to take over the profitable, Brisbane-based carrier.
The shares acquisition triggered the interest of the Australian Competition & Consumer Commission, which released a “statement of issues” in August, expressing its concerns with the Qantas move. These related to the potential lessening of competition in fly-in, fly-out markets and regular public transport routes serviced by Alliance Airlines aircraft.
Submissions were sought by August 21, but no timeline was set for the investigation.
“We generally do not publish provisional decision dates when investigation completed acquisitions (which is where the companies involved did not seek clearance from the ACCC ahead of completing the transaction),” an ACCC spokeswoman said.
Mr McMillan said the process had left the company’s leaders feeling frustrated following what he described as an “unwelcome advance” from Qantas. “It’s gone on for long enough, we just want an answer,” Mr McMillan said.
Should a finding be made that the acquisition did or was likely to lessen competition in breach of the Competition and Consumer Act, the ACCC could institute proceedings in the Federal Court.
As well as declaring the transaction void, the Act includes a pecuniary penalty of up to $10m.
Qantas declined to comment on the length of the investigation. The airline previously said it had no plans to decrease its share holding in Alliance and it would not seek to increase its stake until the ACCC inquiry was completed.
To date Qantas’s $60m investment in Alliance has appreciated 11.6 per cent, or close to $7m, with the smaller airline’s share price improving from $2.40 at the time of purchase to $2.68.
Robyn Ironside