QANTAS Airways and charter flight operator Alliance Aviation Services have announced the abandonment of their US$387 million acquisition plan, a move made in response to the Australian Competition and Consumer Commission's (ACCC) rejection of the deal several months ago, reports Reuters.
The ACCC's decision was based on concerns that the acquisition would likely lead to increased prices and diminished service quality.
The agreement between the two companies was initially forged in May 2022, and it quickly became apparent that securing approval from the ACCC would be a challenging task.
In response to this development, qantas shares experienced a 2.7 per cent drop, while Alliance saw a decrease of one per cent in its shares.
Capital.com senior market analyst Kyle Rodda pointed out that Qantas had determined that the acquisition was more trouble than it was worth, particularly following the ACCC's decision in April.
Additionally, Qantas has been grappling with a brand crisis, partly linked to perceptions of the company acting in an anti-competitive manner.
Although the acquisition plan has been abandoned, Qantas will retain a nearly 20 per cent stake in Alliance.
Furthermore, the flag carrier has agreed to exercise options for four additional aircraft as part of its arrangement with the charter operator.
This will bring the total number of E190s operated by Alliance for Qantas to 26.
It's worth noting that Qantas is not the only airline looking to expand its charter services.
Regional Express Holdings also moves in this direction by acquiring charter operator National Jet Express in July 2022.
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The ACCC's decision was based on concerns that the acquisition would likely lead to increased prices and diminished service quality.
The agreement between the two companies was initially forged in May 2022, and it quickly became apparent that securing approval from the ACCC would be a challenging task.
In response to this development, qantas shares experienced a 2.7 per cent drop, while Alliance saw a decrease of one per cent in its shares.
Capital.com senior market analyst Kyle Rodda pointed out that Qantas had determined that the acquisition was more trouble than it was worth, particularly following the ACCC's decision in April.
Additionally, Qantas has been grappling with a brand crisis, partly linked to perceptions of the company acting in an anti-competitive manner.
Although the acquisition plan has been abandoned, Qantas will retain a nearly 20 per cent stake in Alliance.
Furthermore, the flag carrier has agreed to exercise options for four additional aircraft as part of its arrangement with the charter operator.
This will bring the total number of E190s operated by Alliance for Qantas to 26.
It's worth noting that Qantas is not the only airline looking to expand its charter services.
Regional Express Holdings also moves in this direction by acquiring charter operator National Jet Express in July 2022.
SeaNews Turkey
