Australia’s consumer watchdog says it is continuing to investigate competition concerns from Qantas buying a stake in competitor Alliance Aviation in last year.

“The Australian aviation industry is in a state of major upheaval and now, more than ever, we are concerned that competition by smaller airlines is not hindered,” it said in a statement on Monday.

The ACCC said it will continue to seek information from market participants to gauge any impacts on competition arising from Qantas’s stake in Alliance.

The competition watchdog launched an investigation in August 2019, months after Qantas acquired a 19.9 per cent stake in Alliance.

Qantas has said it will seek approval to increase its shareholding and plans to be the majority owner of the carrier.

“Qantas’s decision to complete the acquisition of the 19.9 per cent stake in Alliance without first seeking ACCC clearance means this is an enforcement investigation rather than a standard merger review,” ACCC Chairman Rod Sims said.

Brisbane-based Alliance has particularly challenged Qantas in regional markets and by providing fly-in, fly-out services for mining companies.

The watchdog says Qantas’ move could reduce supply of these charter services, and regular passenger services.

The ACCC is investigating whether Qantas’s stake affects Alliance’s ability to raise funds, consider takeovers or participate in commercial ventures, and whether Qantas is attempting to exert influence on Alliance’s decision-making or operations.

“The Australian aviation industry remains highly concentrated and it is crucial that competition provided by smaller airlines is maintained long-term,” Mr Sims said.

Qantas shares were trading 0.5 per cent higher to $4.01 at 1200 AEST. Alliance shares were unchanged at $2.61 each.

Source Article