Alliance eyes major expansion as Qantas takeover awaits approval
Queensland based takeover target Alliance Aviation has announced a major expansion with a deal to buy an extra 30 new aircraft lifting its fleet numbers to 100.
Alliance has struck a deal for 30 more Embraer E190 aircraft
The company said the 30 Embraer E190 aircraft were currently leased to an American airline and delivery and payments would start in September. A final cost of the deal was not disclosed because each aircraft’s price would be adjusted according to maintenance and the addition of two new engines before delivery.
Alliance said the aircraft would be put to use across its operations and provide it with increased capacity as well as access to major componentry.
“With the aircraft being delivered over a period of more than two years from September 2023, Alliance will be able to increase services progressively as and when each aircraft is certified after major maintenance checks in Rockhampton,” managing director Scott McMillan said.
Alliance has been targeted by Qantas for take over with an offer made last year. However, the Australian Competition and Consumer Commission said it was concerned that the proposed takeover would potentially substantially lessen competition for air transport services to and from regional and remote areas in Queensland and Western Australia for corporate customers.
“This merger would combine two of the top three operators of air transport services in Queensland and Western Australia” ACCC chair Dina Cass-Gottlieb said.
“Industry participants have expressed strong concerns about the impact of this proposed acquisition on air transport services, particularly to regional and remote areas.”
The ACCC said the proposed acquisition would remove Alliance as the only competitor to Qantas on the Brisbane-Moranbah regional passenger transport route.
The ACCC was also considering how the removal of Alliance’s aircraft leasing services would impact the ability of current and new entrants to compete against Qantas on regional routes.
Alliance was predominantly involved in the charter market and services to mining sector as well as “wet leasing” to other operators.
Alliance said the funding for the deal would be a through a mix of debt and cash generated through its existing operations.
Should all the aircraft be added to the fleet, Alliance would have 100 aircraft consisting of 37 Fokker 100/70 and 63 Embraer E190s.
