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Qantas takes 19.9% stake in Alliance Airlines, eyes control

Qantas has signalled that it intends to take a majority stake Alliance Airlines, having acquired a 19.9% stake in the Brisbane-headquartered operator.

The Oneworld carrier states that the stake was acquired at a total cost of A$60 million ($43.6 million), at an average price of A$2.40 per share.

“Qantas expects to ultimately seek regulatory approval from the [Australian Competition and Consumer Commission] to build on its current shareholding, with a longer-term view of taking a majority position in Alliance Airlines in order to better serve the charter market by unlocking synergies,” it adds.

In the meantime, Qantas says it is taking a “business as usual” approach to the carrier, and will not seek any board seats.

The move appears to have come as a surprise to Alliance, with the airline stating that its board “has not received any approach from Qantas” at the time of the announcement. It has since appointed Catapult Partners and Herbert Smith Freehills as advisors.

Flight Fleets Analyzer shows that Alliance operates a fleet of 23 Fokker 100s, nine F70s and five F50s.

It predominately serves the resource charter market, with major operations in Queensland and Western Australia, but also provides wet-lease capacity to Qantas and Virgin Australia.

In addition, Alliance operates its own scheduled services from Brisbane to Bundaberg, Gladstone and Port Macquarie in association with Virgin using Fokker jets.

It is not clear if Virgin intends to take its own stake in Alliance to protect that arrangement. Virgin also has a tie-up with Alliance through its Virgin Australia Regional Airlines unit that effectively allows both carriers to co-ordinate in the resource charter market.

In recent years Alliance has acquired a number of Fokker jets from Austrian Airlines and KLM, both to boost its own capacity and give it a major source of spares to support its operating fleet over the coming years.

Qantas already has a resource charter operator in its portfolio, stemming from its 2010 takeover of Network Aviation. From its Perth base, the carrier operates 17 F100s and two Airbus A320s on a mix of charter and scheduled services.

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