Qantas Proposes Full Takeover Of Alliance Aviation
Qantas has struck a deal to take over Alliance Aviation, the Australian charter and regional operator that it already partly owns.
Under the agreement, Qantas would obtain 80% of the shares in Alliance, giving it full control. The deal is subject to a vote by Alliance shareholders and clearance from competition authorities.
Qantas purchased nearly 20% of Alliance shares in February 2019, and at that time signaled its interest in acquiring 100% of the carrier. Alliance already performs contracted flying for Qantas in the domestic market.
Alliance has a fleet of about 70 aircraft, comprising mainly Fokker jets and also including Embraer E190s. The carrier operates charter services for Australia’s extensive mining and resources sector. It also operates 18 E190s for QantasLink on regional routes.
The proposed takeover arrangement involves Alliance shareholders receiving Qantas shares worth A$4.75 ($3.41) for each Alliance share they hold, representing a 32% premium to Alliance’s average share price for the past three months. Qantas would issue new shares valued at about A$614 million.
The Qantas Group already operates some Fokker jets, and the takeover would give it a combined fleet of about 70 Fokkers. Qantas CEO Alan Joyce noted that Alliance has a large inventory of spare parts that would “significantly extend the practical life” of its Fokker fleet.
Combining the two fleets would also put the Qantas Group in a much stronger position to bid for contracts in the highly competitive charter market serving the resources industry, Joyce said.