The ACCC is sending the Qantas (ASX: QAN) share price lower after an announcement this morning.
What is Qantas?
Qantas is Australia’s most popular airline. It was founded in the Queensland outback in 1920, the Qantas name was originally Queensland and Northern Territory Aerial Services. The company operates two main airlines – Qantas and Jetstar – and subsidiary businesses including other airlines, businesses in specialist markets such as Q Catering, Qantas Freight Enterprises and the popular Qantas Frequent Flyer program. It employs some 30,000 people with around 93 per cent of them based within Australia.
What did the ACCC announce?
The ACCC said it’s continuing to investigate Qantas’ acquisition of a 19.9% Alliance Aviation (ASX: AQZ) stake.
The regular had previously issued a ‘statement of issues’ which set out its concerns about competition.
With everything that’s going on with Virgin (ASX: VAH), the ACCC wants to make sure that competition by smaller airlines isn’t hindered. Alliance is an important competitor in regional areas.
ACCC Chair Rod Sims said it’s looking at whether it 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.
Mr Sims said: “We will consider enforcement action if there is evidence that the Qantas shareholding is comprising Alliance’s ability to be a strong competitor in Qantas, now and in the future.”
What’s happening to the Qantas share price?
The Qantas share price is currently down around 2% in response to this news. It will be interesting to see if the ACCC takes any more action in the future.
Qantas has already recovered quite a lot of the lost ground due to COVID-19. I’m not sure I’d want to buy shares I see what happens with Virgin to get a better sense of the landscape.
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Disclosure: At the time of writing, Jaz doesn’t own shares in any of the businesses mentioned.
