Gladstone Airport raises concern over Qantas share with Alliance
THE Australian Competition and Consumer Commission are to investigate Qantas Airways’ acquisition of a 19.9 per cent stake in Alliance Aviation – the two only passenger carriers between Gladstone and Brisbane.
Qantas acquired a 19.9 per cent interest in Alliance February last year, becoming Alliance’s single biggest shareholder.
On August 1 the ACCC issued a statement of facts, outlining concerns including the effect of substantially lessening competition in fly-in fly-out markets where Alliance Airlines is often Qantas’ only competitor and lessening the competition between the two airlines.
Gladstone Airport Corporation chief executive Mark Cachia said he was aware of the ongoing investigation and was concerned about the impact such an acquisition would have on competition in Gladstone. “In the current climate in particular it makes Qantas an even larger carrier and stakeholder in the domestic market,” Mr Cachia said.
“Obviously having one carrier does provide a limit of competition.
“It just depends on how the regulator manages that stake within Alliance Airlines.”
He said at the moment there was no impact on the Gladstone Airport.
ACCC chairman Rod Sims said Qantas’s decision to complete the acquisition without seeking ACCC clearance meant this was an enforcement investigation.
“The Australian aviation industry remains highly concentrated and it is crucial that competition provided by smaller airlines is maintained long-term,” Mr Sims said.
“The ACCC has been closely scrutinising the effects of the acquisition of this shareholding by Qantas. Acquiring a strategic stake in a close competitor in such a concentrated market raises clear competition concerns.”
He said the ACCC would consider enforcement action if there was evidence the Qantas shareholding compromised Alliance’s ability to be a strong competitor to Qantas now and in the future.
A Qantas spokesman acknowledged the importance of competition in the aviation market but rejected the suggestion the minority share would have any impact on competition as the shareholding was entirely passive and Qantas had no influence on Alliance management.
“Since Qantas became a shareholder, Alliance has continued to expand in competition with Qantas and others in the charter market,” he said.
“The shareholding has given Qantas more exposure to earnings from the resources sector, which is one of the few bright spots in the current domestic market and is primed for further growth.”
The spokesman said Qantas was co-operating fully with the investigation.