Australia's Qantas Airways today made a bid to acquire the remaining 80pc it does not own in Australian air charter operator Alliance Aviation Services, through an issue of Qantas shares to Alliance shareholders that value the offer at A$641mn ($463mn).
Part of the rationale for the acquisition is for Qantas to attain more of the fly-in, fly-out market to Australia's resources sector. "The resources sector continues to grow and any new tender for airline services will be very competitive," said Qantas' chief executive officer Alan Joyce.
If Qantas is successful with its bid, it would lead to a further concentration in ownership of Australian domestic airline operators, with Qantas commanding a domestic market share of 62pc in the month of January, according to a report by the Australian Competition and Consumer Commission (ACCC).
Qantas expects increased demand for international travel to lead to higher jet fuel prices in the first half of the 2022-23 fiscal year to 30 June.
Qantas is currently Australia's biggest airline and flies under its own brand name, as well as its low-cost airline Jetstar. Both airlines each had around 31pc of the domestic market share in January, the ACCC report said.
Private equity-owned airline Virgin Australia had a 34pc market share in January, and Rex Airlines had the remaining 4pc, according to the ACCC.
Alliance has a fleet of 70 jet aircraft that seat up to 100 people each, Qantas said. Between charter services provided by Alliance and a small number of passenger routes to large mine sites around the country, Alliance accounts for around 2pc of the total domestic market.
