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The Qantas Group intends to boost its recently acquired shareholding in Australian-based charter operator, Alliance Airlines, to a majority, but Virgin Australia has a few reservations.

Qantas announced last week it was taking a 19.9% shareholding in Alliance.

It said Alliance Airlines was a significant service provider to the resources sector, which continued to stimulate travel demand in Western Australia and Queensland in particular.

“Alliance is a profitable, well-managed business with high levels of operational maturity. It is also a long-term provider to the Qantas Group and flies regional services on behalf of the national carrier,” a Qantas statement said.https://join.travelmanagers.com.au/benefits/earn-more/

The 19.9% stake was acquired for an average price of AUD 2.40 per share and for a total cost of AUD 60 million.

Qantas confirmed it expects to ultimately seek regulatory approval from the ACCC to build on its current shareholding, “with a longer-term view of taking a majority position in Alliance Airlines in order to better serve the charter market by unlocking synergies”.

In the meantime, Qantas is supportive of the “business as usual” approach of Alliance Airlines management and is not seeking board representation.

Virgin Australia said the Qantas move raised “significant concerns” and it would be looking closely at the potential impact of the deal on domestic competition.

“Our close commercial relationship with Alliance is important to a strong competitive aviation market, including for regional services in Queensland and charter/FIFO services supporting the mining industry,” Virgin stated.

“We remain committed to our partnership with Alliance who are a strong and important partner for Virgin Australia.”

Virgin Australia has already lodged an objection to a Qantas proposal to share codes with Cathay Pacific on the Hong Kong route. See: Will Qantas reveal secrets of its Cathay codeshare deal?

Written by Peter Needham