IGI Logo

Australian flag carrier Qantas on Thursday announced it has struck a A$614 million ($444 million) deal to buy airline service company Alliance Aviation Services in a bid to grow its servicing of the resource sector.

The deal would see Qantas purchase a remaining 80 percent stake in the company after buying 20 per cent at the beginning of 2019, reports Xinhua news agency.

The deal would see Qantas acquire Alliance's fleet of around 70 Fokker jet aircraft, each with a seating capacity of 100. The Fokker is well suited to small-scale charters, such as flying workers out to Australia's remote mining sites.

Qantas CEO Alan Joyce said acquiring the remaining shares in Alliance would allow the airline to better compete in Australia's aircraft charter industry.

"Alliance's fleet of Fokker aircraft is perfect for efficiently serving resources customers in Western Australia and Queensland. They also have a big inventory of spare parts that would significantly extend the practical life of a combined fleet of around almost 70 Fokkers," said Joyce.

Pre-empting anti-competition pushback, Qantas advised Australia's peak competition watchdog, the Australian Competition Consumer Commission (ACCC), detailing the anticipated benefit to customers the deal would have.

"The resources sector continues to grow and any new tender for airline services will be very competitive."

"It makes a lot of sense for us to combine with Alliance to improve the services we can offer, which is positive for both airlines as well as the travelling public."

The deal has received full approval from the Alliance board of shareholders and is expected to go ahead following approval from the ACCC.