Qantas share price dips as ACCC raises acquisition concerns

The Qantas Airways Limited (ASX: QAN) share price is in negative territory on Thursday.

This comes after the competition watchdog signalled its concerns about Qantas’ monopoly in the domestic travel market.

At the time of writing, the airline operator’s shares are down 0.62% to $4.79.

ACCC outlines preliminary competition concerns

In today’s release, Qantas informed the market of the latest saga regarding its proposed acquisition of Alliance Aviation Services Ltd (ASX: AQZ).

The statement of issues published by the Australian Competition & Consumer Commission (ACCC), expressed concerns about the Qantas merger and how it will negatively impact competition.

Qantas and Alliance provide air transport services to regional and remote areas across the country. This includes operating routes for mining and resource companies that need to transport ‘fly-in fly-out’ workers.

If the acquisition goes ahead, it would mean that Qantas would control two of the top three air transport services in Queensland and Western Australia.

For example, Alliance is the only competitor to Qantas on the Brisbane-Moranbah regional passenger transport route.

As industry participants have expressed strong concerns, the ACCC is considering the level of competition provided by other airlines. Virgin and Cobham’s regional services arm, which was recently purchased by Regional Express Holdings Ltd (ASX: REX) also operate regional and remote routes.

ACCC chair, Gina Cass-Gottlieb said:

Our preliminary view is that there are already significant barriers for airlines who want to enter or expand their operations in regional and remote areas, including access to pilots, airport facilities and infrastructure, and associated regulatory approvals.

… A competitive and well-functioning aviation sector is fundamental to the Australian economy.

Furthermore, the ACCC is also looking into how the removal of Alliance’s aircraft leasing services would affect the other competitors.

Alliance is a key supplier of wet-leased medium-sized aircraft to other airlines. Wet-leases are arrangements where an airline leases a plane, crew, and other related services from another airline or business.

Despite the update, investors appear to have largely shrugged off the news with the Qantas share price travelling slightly lower.

On the other hand, the Alliance Aviation share price is down 3.66% to $3.42 apiece.

Qantas share price snapshot

Since the start of 2022, Qantas shares have travelled on a rollercoaster, posting a loss of around 5%.

However, when looking at a larger time frame such as the last 12 months, its shares are up 8.5%.

Qantas commands a market capitalisation of approximately $9 billion, making it the 59th largest company on the ASX.

The post Qantas share price dips as ACCC raises acquisition concerns appeared first on The Motley Fool Australia.

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More reading

• What’s creating tailwinds for the Qantas share price today?
• What’s lifting the Qantas share price on Monday?
• Qantas share price unimpressed despite $15m solution to ‘well-publicised challenges’
• Why did the Qantas share price fly higher today?
• Why is the Qantas share price beating the ASX 200 today?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Alliance Aviation Services Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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