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Virgin Australia concerned by Qantas move on Alliance Airlines

Virgin Australia has raised concerns that Qantas’s acquisition of a 19.9% stake in Alliance Airlines and its desire to take control of the independent carrier could impact competition in the Australian market.

In a statement provided to FlightGlobal, the airline says that Qantas’s stated intention “raises concerns and we will be looking closely at the potential impact to competition in the domestic market.”

Virgin has a strong commercial relationship with Alliance Airlines, under which the latter carrier operates some of its Fokker 100s and 70s on regional routes from Brisbane, while the two carriers also have a tie-up covering charter services.

Most of that capacity is on routes previously operated by Embraer 190s and some of the ATR 72 turboprops that have left Virgin’s fleet in recent years, as the carrier has sought to reduce its fleet complexity and increase cash generation.

“We remain committed to our partnership with Alliance who are a strong and important partner for Virgin Australia,” the airline adds.

Alliance also provides some wet-lease capacity to Qantas on selected routes, but does not have the same level of relationship it does with Virgin.

Qantas has signalled that it will apply to the Australian Competition and Consumer Commission for permission to raise its stake in Alliance, and ultimately plans to take a controlling stake in the Brisbane-based operator.

Alliance states that its board has “not received any approach from Qantas”, and it has retained Catapult Partners as financial adviser and Herbert Smith Freehills as legal adviser.

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