Qantas Airways reaches agreement to fully acquire Alliance Airlines

5 May, 2022

Qantas Airways reached (05-May-2022) an agreement to fully acquire Alliance Aviation Services Limited, subject to a vote from Alliance shareholders and competition clearance. Details include:

  • The acquisition would see Alliance become a wholly owned part of the Qantas Group, with no change to Qantas' arrangements with Alliance;
  • Required approvals would take a minimum of several months to secure;
  • Qantas purchased under 20% of Alliance in Feb-2019 and at the time flagged an interest in acquiring 100% of the airline. The ACCC investigated the minority holding for three years and made no findings that it lessened competition;
  • Under the agreement, the remaining 80% would be acquired through a scheme of arrangement where Alliance shareholders receive Qantas shares worth AUD4.75 (USD3.44) for each Alliance share they hold, representing a 32% premium to Alliance's volume weighted average price for the past three months. Qantas would issue new shares valued at approximately AUD614 million (USD445.2 million) in a transaction that is expected to be EPS accretive for Qantas shareholders, before synergies;
  • Qantas has advised the ACCC of the announcement and will continue to update the market on expected completion timing as the competition clearance and Alliance shareholder vote processes progress.

Qantas Group CEO Alan Joyce stated Alliance's fleet of Fokker aircraft will be "perfect for efficiently serving resources customers in WA and Queensland". Mr Joyce added the aircraft also have a "big inventory of spare parts that would significantly extend the practical life of a combined fleet of around almost 70 Fokkers". He added: "We plan to extend our programme of guaranteed lower fares for residents in those few communities where Alliance operates its own passenger services, as well as access to our Frequent Flyer programme". [more - original PR]