However, Qantas said it would retain its 20 per cent stake in the charter operator.

Qantas had planned a $614 million deal to takeover the company, but the Australian Competition and Consumer Commission vetoed the scheme because it believed it would reduce competition in the fly-in, fly-out market in which Alliance serves.

Qantas controls about 27 per cent of the FIFO market.

To pursue the deal, Qantas would have needed to take court action and today it said it still believed that it would have created customer value without lessening competition.

“However, both companies acknowledge that there is no reasonable path forward for the deal at present,” Qantas said.

“Qantas will continue to serve the growing resources sector through its existing charter operations.

“The group will retain its shareholding of nearly 20 per cent of Alliance and will continue its long-term agreement that sees Alliance operate up to 30 E190 aircraft for the Qantas Group.”

Qantas’s John Gissing, who heads the associated airlines and services business, said Alliance was an important partner and the E190s had helped open new routes.

Alliance managing director Scott McMillan said despite the deal being scrapped his company was looking forward to continuing its relationship with Qantas.