Qantas buys Alliance
 

Qantas this morning has advised the ASX of the acquisition of 100% of Alliance. Subject to ACCC approval. Didn't see that coming so soon.

Just what we need. Less competition.

This cannot be good for Australian aviation.

Let’s hope the accc stop this.

Yet another pilot group to play off against each other, further driving down wages…….

I did!! As soon as the ACCC dropped the opposition to Qantas buying us, I knew that the Irishman would make a offer ASAP. From our flight planning procedures to normal operating procedures, Qantas has been creeping in, and I guess that we will have to wear the QF uniform, just like most of the FA's already do. Bring it on, I say!
https://cdn-api.markitdigital.com/ap...df02a206a39ff4

https://cimg6.ibsrv.net/gimg/pprune....3746cf41b.jpeg

Just don’t ask about staff travel

haha, what is it about QQ and staff travel!

How about a new fleet of Airbus 220 coming their way.

Only if the pilots accept a C scale below the E jet contract pay! That's how the game works isn't it?
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Aussie Aviator, I assume with that foresight you bought Alliance shares then?

I think you mean Qantas intend to purchase.
Two big hurdles to jump. One is shareholder agreement and the trickier ACCC approval.

Qantas has announced it intends to purchase Alliance Aviation, three years after acquiring a 19.9 per cent stake in the carrier.

The airline said on Thursday that the move, which would see Alliance become a wholly-owned subsidiary of Qantas, would allow it to “better serve the growing resources sector”.

It comes just one month after the ACCC finally cleared Qantas’ stake in the airline, after a three year investigation into its impact on competition.

Alliance currently holds wet-lease agreements with both Qantas and Virgin, for the use of its fleet for regional, charter, and fly-in fly-out operations.

It also comes after Qantas exercised more options under its wet-lease with Alliance in March, for the use of 14 QantasLink-branded Embraer E190s, crewed by Alliance personnel. The agreement offers Qantas options to use up to 18 Alliance E190s under the QantasLink brand.Qantas said its existing agreement with Alliance will continue to operate as normal until any deal is finalised.

Qantas said the remaining 80 per cent share of Alliance would be acquired through a scheme of arrangement, where Alliance shareholders receive Qantas shares worth $4.75 for each share held in Alliance.

This represents a 32 per cent premium to Alliance’s volume weighted average price over the last three months, according to the airline Alliance’s directors have unanimously recommended the scheme, with Chairman Steve Padgett stating the transaction “represents a compelling opportunity for our shareholder to exit the Alliance business following a period of significant industry upheaval, and to realise a strong return on Alliance’s fleet assets”.

Qantas has informed the ACCC of its intentions, and the final deal will require formal approval from the competition watchdog. The deal is also subject to approval by Alliance shareholders.

Qantas purchased a 19.9 per cent stake in Alliance in 2019, and has long-flagged its desire to acquire 100 per cent of carrier.

Qantas Group CEO Alan Joyce said acquiring Alliance under the QantasLink brand allows the airline to be more competitive in the fierce regional aviation market.

“Alliance’s fleet of Fokker aircraft are perfect for efficiently serving resources customers in WA and Queensland,” Joyce said.

“They also have a big inventory of spare parts that would significantly extend the practical life of a combined fleet of around almost 70 Fokkers.

“Keeping these aircraft operating reliably for longer than either carrier could achieve themselves will help keep costs down, which is ultimately good news for charter customers,” he said.

“The resources sector continues to grow and any new tender for airline services will be very competitive. It makes sense for us to combine with Alliance to improve the services we can offer, which is a positive for both airlines as well as the travelling public.”

Be careful what you wish for. It might be good for the Alliance group (I don't know what it's currently like there) if it goes ahead but don't expect it to be all rainbows and unicorns.

More like pineapples and sand.

send me your address, and I’ll forward my hat 👍🏻

How likley is this to get past the ACCC anytime soon, if at all?
Didn't it take about 3 years to give the nod to just a 20% holding in AQZ?

Ouch :ouch:

Depends how convincing Virgin’s argument is. They put forward a strong case against the QF/Japan tie up which got rejected (and rightly so), with the regulator citing many reasons VA raised.

Careful what you wish for buddy. I hope you like base closures and forced transfers because thats exactly what will be happening once QF management start to rejig.

Wonder what this means for Network?

It would seem that with Alliance being so much more involved on a national scale with FIFO work, including a huge presence out west, that keeping Network and it’s old F100s and hand me down Buses is pointless?

Don’t alliance have several EBs to negotiate too?

Or will there be one pineapple to unite them all?

I suspect the Alliance customers at the big end of FIFO town might have in interest in seeing a torpedo in this too.

Isnt this exactly what he would have wanted,another group of pilots to play off against any other group that opposes him.
The word 'opportunist' comes to mind,along with a few others which would probably not be appropriate on here.

If it goes through, it’ll be the end of Fokker’s at Network.

They’ll focus on 320/321.

As for NJS, if they thought they had little cards to play in their EBA negotiations before, they have close to none now.

I have considerable respect for the timing and prescience demonstrated by Alliance's management. I'm guessing they think something is about to happen either in the economy or the aviation industry such that Alliance has chosen this moment as the best time to take the money and run. Remember their previous incarnation, Flight West Airlines, with some of the same names in management? Flight West chose to go into voluntary liquidation shortly before the Ansett collapse and was reincarnated/did a Phoenix as Alliance the following year. I wonder how it will play out this time around?

The initial rumour mill at Alliance was it could be up to 30 E190’s.

“We’ve opened up several new passenger routes using up to 18 of Alliance’s E190s, so bringing all 33 of these aircraft, plus their crews, into the Qantas Group would really expand what we could achieve.
“We plan to extend our program of guaranteed lower fares for residents in those few communities where Alliance operates its own passenger services, as well as access to our Frequent Flyer program,” added Mr Joyce.

Maybe it wasn’t far off the mark . . . . . .

No rumours needed. Just read the ASX releases. 16 announced and 14 announced. Thirty airframes.
If you want rumours, how about up to fifty aircraft.
I

VIrgin won’t be overly excited about if considering they also use Alliance in some RPT routes

Maybe VARAs announced 737-700s will be the replacement for East Coast F100 ops, not just west Coast FIFO?

Well, it'd have to be pretty convincing to get around the fact that VA bought SkyWest, then if I remember correctly, parked some of it's aircraft and some of the VA aircraft, then realised they didn't have enough so had to pay through the nose for Alliance to operate for them.

Couple that with the absolute debacle that was the A320/737 at TT and the stuff up with being kicked off the DPS route after repeatedly being warned it wasn't allowable to substitute another carrier, whether you owned them or not.

I think it would be hard to justify any objection after VA themselves gobbled up a FIFO carrier.

I look forward to QF showing VA how to make an E190 operate profitably.

so the qantas domestic fleet now has

e190 94 seat's
f100 100 seat's
717 110 seat's
220 137 seat's
737 174 seat's
320 180 seat's
321 200 seat's

anymore niche's to fill?

Welcome to the whipsaw, a common tactic US legacy airlines used for over 20 years to keep their regional partners cheap. It was literally this tactic that had regional pilots living on government assistance because they were paid so little.

The good news is, the whipsaw works both ways. If one of Qantas' subsidiaries can land a better contract, the others will rise too. But if one takes a concessionary contract, the rest come down. Good luck to all involved, you deserve a win.

I’ve heard they’ve put in a bid for Shoal Air (KNX) and Air Frontier (DRW) so they can further expand their network and ensure QF have adequate interline pax into the future.

A strategy which resulted in the bankruptcy of most regional airlines, new laws passed for minimum experience levels for RPT and a subsequent pilot shortage, with airlines forced to import foreign labour and put passengers on buses. But don’t worry I’m sure those in management who arranged all that still got their bonus.

Can't wait for the photo op with Geoff and Alan, together, dressed in their business best in the Air Frontier 'boardroom' :}​​​​​

And let us not forget the Colgan accident. The tactic so loved by our airline management here in Oz actually contributed to the deaths of a Q400 load of people.

100%!! The whipsaw is an evil practice, but those who are implementing it today in Aus will have ridden off into the sunset years ahead of these consequences. Unfortunately, as is always the case, it's the pilots with broken careers left to pick up the pieces. Hopefully the US hoovers up enough Aussie pilots for the whipsaw to be to the detriment of airline management.

For perspective, the US is slated to hire in the order of 10,000 pilots every year for the next little while (how long who knows). Aussies won't make the slightest dent in the shortage here, but a loss of even 10% of the Aussie workforce would certainly liven up the domestic scene.

Slight difference is that in the USA, most “regionals” weren’t wholly owned - they were essentially wet leases. Most of the majors sold them off. A couple were bought back over the years but the leverage came from them being owned by independent companies fighting it out to get the flying contracts. This forced wages down.

Wasn’t it Pinnacle, when they were independently owned, that won a bid for delta flying (?) right after the pilots got a new contract and then filed for chapter 11 so they could revert to the old contract wages so they could continue the flying? Disgusting

It is inconceivable (to me) how a competition regulator could possibly approve this acquisition.
Alliance not only provides aircraft and crews to Qantas's main competitor, it also provides competition to Qantas and Virgin on FIFO and other charter contracts, such as transporting football teams around.
Qantas, at one swoop, would have driven up costs for Virgin, mining companies and anyone else that wants to hire an aircraft bigger than a Navajo.
Did the Morrison Government really provide all that taxpayer money to Qantas during the pandemic so that Mr. Joyce could spend it all on getting rid of his competition?
Never mind the ACCC there should be an outcry from the taxpayers!

The thing is that the ACCC looked into Qantas's first strike in taking the 20% slice of Alliance for three years, and ultimately cleared it, knowing full well that Qantas bought that stake with a view to taking over Alliance. The end of that investigation gave Qantas tacit approval, and although the ACCC will drag their feet in approving the full takeover, it will more than likely pass.

In a year or so once the takeover is completed, the landscape will look very interesting, but there are alternatives to QQ out there. Cobham has been scaling up the Q400s and E-Jets in WA and is up for sale, Airnorth has added frames and must surely be looking for some sweet, sweet charter revenue. Australian Corporate Jet now has an ERJ-145 and could add more pretty cheaply, so that could take up some of the more ad hoc work.

Not bad for an airline that received a billion odd dollars in Gov support during covid and here we are 4 months after borders open able to spend a billion on another airline acquisition. Just proves what folks have said on here for years what a master manipulator AJ and his team really are. More like an Irish Shiester !

Joyce is not spending real money. The transaction is funded by issuing new Qantas shares and exchanging them for Alliance shares.