Qantas is pushing harder into the resources sector charter flights market after reaching a deal worth hundreds of millions of dollars to take over a leading operator.
Qantas bought 20 per cent of Alliance Aviation Services in 2019 and now plans to acquire the rest, pending AAS shareholder and competition regulator approvals.
Qantas CEO Alan Joyce said tenders for airline services in the resources sector, including the fly-in fly-out market, are very competitive.
“It makes a lot of sense for us to combine with Alliance to improve the services we can offer, which is a positive for both airlines as well as the travelling public,” he said on Thursday in a statement.
Alliance has a fleet of Fokker aircraft – Qantas’s existing QantasLink service also operates Fokkers – which are perfect for serving customers in Western Australia and Queensland, Mr Joyce said.
“They 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 said.
“Keeping these aircraft operating reliably for longer than either carrier could achieve by themselves will help keep costs down.”
Under the deal, AAS shareholders will receive two Qantas shares worth $4.75 for every ASS share they hold.
Qantas will issue new shares valued at around $614 million to support the transaction.
AAS chair Steve Padgett said the carrier’s market had recently undergone significant upheaval and noted some shareholders might take the opportunity to exit and profit from their forthcoming Qantas shares.
Nevertheless, the deal offers a strong return on AAS’ fleet assets as well as substantial synergy benefits, managing director Scott McMillan said in a statement.
“We expect these operational benefits to translate into valuable customer experience benefits, including less aircraft downtime, few disruptions and greater aircraft availability to fulfil ad hoc charter requests.”
AAS, which has been operating for more than 20 years, has a full-time workforce of 850 and bases in Brisbane, Townsville, Cairns, Melbourne, Adelaide, Perth, Darwin and Rockhampton.
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