The Australian Competition and Consumer Commission (ACCC) has announced it plans to block a strategic partnership between Alliance Airlines
(ASX:AQZ) and Virgin Australia in the Western Australia chartered flights market.
Both airlines wanted to work together on joint tendering for corporate fly-in/fly-out (FIFO) contracts.
However, the ACCC’s view is that the proposed charter alliance, if it went ahead, would materially reduce competition for the supply of FIFO services to corporate customers in WA. In particular, it would only leave Qantas and the Alliance/Virgin partnership as the major competitors for those services.
Virgin and Alliance will provide the ACCC with further information in an attempt to convince the regulator of the benefits of their proposed alliance.
Alliance Airlines reported a net profit of $13.5 million at 30 June 2016.
